Archive for September, 2012

Employees of City Contractor Can’t Sue Under Prevailing Wage Law, Minn. Supreme Court Holds

You know a labor and employment case is a big deal when alot of outside parties file briefs in the case in support of one side or another, even though those groups don’t have a direct stake in the outcome.

Such was the situation when a dispute over whether employees a contractor that did work for the city of Minneapolis had third-party rights under the state’s prevailing wage law to sue the contractor for allegedly denying them the prevailing wage.

Among the entities weighing in on this question were the city, the state of Minnesota,  Hennepin County, and National Employment Lawyers Association, and various contractor association.

The Minnesota Supreme Court tossed the employees’ suit, holding that they were not third-party intended beneficiaries of the prevailing wage law.

Appellants Oscar Caldas, et al., were employed by AGS, to perform work at the Minneapolis Convention Center pursuant to a contract between AGS and the City. After completion of the project, appellants brought this action against AGS, alleging (1) that AGS failed to pay them the prevailing wage in breach of the contract with the City and that they are entitled to enforce the contract as third-party beneficiaries, (2) that the breach of the contract by AGS violated state wage statutes, and (3) that AGS was unjustly enriched as a result.

The Minnesota Supreme Court rejected their claim, concluding that:

“The promise of AGS to properly classify work in accordance with U.S. Department of Labor criteria and to pay the prevailing wage to employees was a general promise to comply with the law, which does not confer upon AGS employees the right to enforce the law.”

It’s up to the city to investigate any alleged prevailing wage violations under the contract and pursue any remedies against the contractor, the high court concluded.

Read the decision here.

Filing Deadline Extended to Oct. 31 for VETS 100,100A Reports

The filing deadline for two forms detailing federal contractors’ efforts to hire more military veterans has been extended to October 31, the government announced this week.

The Veterans’ Employment & Service Training made the announcement on its website. The original deadline was Sept. 30, which is also when the EEO-1 reports are due.

Under the affirmative action program, contractors and subcontractors  who enter into, or modify a contract or subcontract with the federal  government, and whose contract meets the criteria set forth in the Vietnam era Veterans Readjustment Assistance Act, are required to report annually on their affirmative  action efforts in employing veterans. VETS has a legislative requirement to  collect, and make available to the Office of Federal Contact Compliance Programs, reported data contained on the VETS-100  and/or VETS-100A reports for compliance enforcement.

The VETS-100 Report calls for federal contractors and subcontractors to report the number of employees and  new hires during the reporting period who are:

(1) Special disabled  veterans;

(2) Veterans of the Vietnam era;

(3) Other protected veterans (veterans  who served on active duty in the U.S. military during a war or in a  campaign or expedition for which a campaign badge is awarded); and

(4) Recently separated veterans (veterans within 12 months from discharge or release from active duty).

By comparison, the Vets 100A requests that contractors and subcontractors report the number of employees and new hires during the reporting period belonging to the following categories:

(1)  Disabled veterans;

(2) Other protected veterans (veterans  who served on active duty in the U.S. military during a war or in a campaign  or expedition for which a campaign badge is awarded);

(3) Armed  Forces service medal veterans (veterans who, while serving on active duty in  the Armed Forces, participated in a United States military operation for which  an Armed Forces service medal was awarded pursuant to Executive Order 12985);  and

(4) Recently  separated veterans (veterans within 36 months from discharge or release from  active duty).

Note, the U.S. Department of Labor has proposed regulations to require contractors to establish annual hiring benchmarks for veterans. You can read more about that proposal at OFCCP’s website.

The Cascade Employers Association, a resource on topics for Oregon employers, has more information on the extension and the requirements for VETS-100 and 100A filing.

Sears, Darden to Give Employees Money to Purchase Health Insurance

In a move certain to be watched and studied by other employers, two large companies have announced that they will no longer provide health insurance for their employees but instead will give them money with which to buy their own insurance on the open market.

Sears Holdings and Darden Restaurants–owner of Olive Garden and Red Lobster–currently self insure their employees, meaning they pay the insurance claims from the companies’ treasury.

That’s going to end now.

It’s a fundamental change…the employer is saying, ‘Here’s a pot of money, go
shop,’ ” said Paul Fronstin, director of health research at the Employee Benefit
Research Institute, a nonprofit. The worry for employees is that “the money may
not be sufficient and it may not keep up with premium inflation.”

He was quoted in today’s Wall Street Journal.

The companies wouldn’t say how much they will give their workers.

Analysts likened the move to the shift from employer defined benefit retirement plans to defined contribution plans that put the onus on the employee to make smart invetments.

Is this further evidence of the collapse of the employer-sponsored health insurance market? We’ll have to wait and see.

NLRB Appointments Challenged in Court Brief

President Obama’s recess appointments of two National Labor Relations Board members continues to stoke controversy.

Forty two Republican senators have filed a friend-of-the-court brief assailing these appointments to the National Labor Relations Board as unconstitutional because they were not made when the Senate was in recess.

The brief was signed by 42 of 47 Republican senators.

The vehicle for the brief is the case of Noel Cannon v. National Labor Relations Board, which originated in Washington state. The bottling and canning company is challenging an NLRB ruling that it violated labor laws.

The National Chamber Litigation Center, which advocates on legal and regulatory issues on behalf of the U.S. Chamber of Commerce, has a motion pending in the U.S. Court of Appeals for the D.C. Circuit to intervene in the case.

I wrote about the recess appointments last December.

75-Employee Minimum Under Connecticut FMLA Means In-State Workers Only

Only employees working in Connecticut count toward that state’s 75-employee minimum for family and medical leave act coverage, the Connecticut Supreme Court ruled today.

The high court bowed to a ruling by the state labor commissioner, who is responsible for enforcing the law, that the 75-employee requirement covers only in-state employees, even though the statute is silent about that.

As a result, the Connecticut Supreme Couurt held that an apartment complex manager was not coverd by the state law, and Related ManagementCo. could not hbe held liable for her dismissal, after more than 20 years on the job, following leave for a fractured hand.

Here’s the ruling if you’d like to read it.

EEOC Says National Origin, Religious Discrimination Continues Against Arabs and Muslims

National origin and religious discrimination against Muslims and Arabs persists some 11 years after the Sept. 11, 2001 terrorist attacks, the Equal Employment Opportunity Commission said recently.

In a document titled, “What You Should Know about the EEOC and Religious and National Origin Discrimination,” the commission said that in the initial months after 9/11, the EEOC saw a 250 percent increase in the number of religion-based discrimination charges involving Muslims, prompting creation of a special code to track these complaints.

Between 9/11/2001 and 3/11/2012, 1,040 charges were filed that were related to the attacks by an individual who is – or is perceived to be – Muslim, Sikh, Arab, Middle Eastern or South Asian, EEOC said.

While the number of charges directly related to 9/11 has dwindled, the EEOC continues to see an increase in charges involving religious discrimination against Muslims and alleging national origin discrimination against Muslims or those with a Middle Eastern background.

The EEOC also said it has filed nearly 90 lawsuits alleging religious and national origin discrimination involving the Muslim, Sikh, Arab, Middle Eastern and South Asian communities, many of which involved harassment.  The alleged harassment included taunts such as “Saddam Hussein,” “camel eater,” and “terrorist.”  A few recent cases include:

In addition, the EEOC has intensified its outreach, created fact sheets on immigrant employee rights ( and discrimination based on religion, ethnicity or country of origin (  The EEOC has also provided information to employers concerning their responsibilities in employing Muslim, Arab, South Asian and Sikh workers (

Massachusetts Enacts “Right to Know” Law For Temporary Workers

Temporary employees in Massachusetts won important rights recently when a new law was signed by Gov. Deval Patrick.

The “Right to Know” law requires temporary staffing or employment agencies to make disclosures to workers about wages, hours, working conditions and coverage for benefits such as workers’ compensation should they get hurt.

The bill prohibits agencies from charging certain fees, like the cost of registering with the staffing agency or for performing a criminal record check. Staffing agencies are also prohibited from charging any fee that would reduce a worker’s pay below minimum wage ($8 per hour), and are required to reimburse workers if it sends them to worksites for the purposes of working when no work is available.

DOL Launches New Online Resources on Retirement Plan Fees

The U.S. Department of Labor is coming to the aid of consumers and plan sponsors that want to get the most benefit from a series of new rules on disclosure of fees paid by 401(k) retirement plan participants.

DOL’s Employee Benefits Security Administration this week announced the launching of new online resources on these fee disclosure rules. The first site,, offers information on disclosures that, for the  first time, will help workers with 401(k)-type retirement plans see what they  are paying to invest their savings. It also includes new tips and tools on  making smart retirement investment decisions.

According to DOL’s announcement: “As a result of a rule published by EBSA, workers investing  in 401(k)-type plans began receiving fee disclosures from their employers this  summer, marking the first time that employers have been required to provide  this information. Research has shown that paying just 1 percent more in fees  can lead to a 28 percent decrease in a 401(k) account balance over the course  of a career.”

Separately, EBSA announced a new online filing system tool by which sponsors seeking fiduciary relief for a service provider’s  failure to comply with the department’s plan-level fee disclosure rule will be  able to use a new online filing system, replacing the option of electronically  sending notices to a previously established email address.

The final service provider-to-plan sponsor fee disclosure rule,  referred to as the 408(b)(2) regulation for the relevant section in the  Employee Retirement Income Security Act, became effective on July 1, 2012. It includes  a provision to protect plan sponsors, or other responsible plan fiduciaries,  from liability for a breach of their fiduciary duties under ERISA when, without  the plan sponsor’s knowledge, a service provider fails to comply with the rule’s  comprehensive disclosure requirements. If a plan sponsor discovers that required information has not been furnished, and efforts to obtain the  information are not successful, the sponsor must notify the department, by  regular mail or electronically.

Labor Board Says Costco Ban on Employee Communications Violated Law

Next time you shop at Costco, you might overhear employees talking about things like who is on FMLA leave or who has an accommmodation under the Americans With Disabilities Act.

The company had rules banning such discussions, but now the National Labor Relations Board said it went too far, violating settled federal labor law on workers’ rights to communicate.

In its Sept. 7 ruling, the board determined that the following rules violated Section 8(a)(1) of the law, which prohibits enforcement of work rules that tend to “chill” employees in the exercise of their rights to engage in concerted activity under Section 7.

Remember, Section 7 rights do not depend on the presence of a union. Employees can act collectively without one, and employers respect their right to do so.

The labor board ordered the company to drop its rule banning “unauthorized posting, distribution, removal or alteration of any material on Company property” as well as discussing private matters of members and other employees, including topics such as, but not limited to, sick calls, leaves of absence, FMLA call-outs, ADA accommodations, workers’ compensation injuries, personal health information, etc.

The company also violated the NLRA by prohibiting the sharing of “[s]ensitive information such as membership, payroll, confidential financial, credit card numbers, social security number or employee personal health information and sharing “confidential” information such as employees’ names, the board said.

On the other hand, the board ruled that Costco did not violate the NLRA by a rule requiring employees to use “appropriate business decorum” in communicating with others, or in prohibiting employees from “[l]eaving Company premises during working shift without permission of management.”

Read the full decision here.

Hospital Bends on English-Only Rule in Filipino Nurses’ Suit

Requiring employees to speak English on the job can run afoul of federal and state job discrimination laws by giving the appearance that the rule is targetted at employees who are bi- or multilingual.

In these cases, employers have the high burden of showing that the policy is a business necessity without which its operations would come to a standstill.

Given this hurdle, some employers choose to switch rather than fight.

The latestg case in point: A California hospital has settled a Title VII lawsuit for $1 million brought against it by Filipino nurses. The nurses had accused the Delano Regional Medical Center, near Bakersfield, of banning them from speaking Tagalog and other Filipino languages, while letting others speak in their languages and even encouraging other staff members to report them.

According to the complaint, Filipino nurses in Delano were called to a special meeting with hospital managers in 2006, warned not to speak Tagalog, and told surveillance cameras would be installed, if necessary, to monitor them.  They were the only language groups were included in the meeting, the lawsuit states.

In settlement the case, the hospital agreed to develop strong protocols for handling complaints of harassment and discrimination; adopt a language policy that complies with the Civil Rights Act; and conduct anti-harassment and anti-discrimination training for all staff with additional training for supervisors.

Interestingly, the policy–requiring he use of either English or the patient’s preferred language while care is provides, remains in effect, although the hospital says it has been modified.

According to the hospital’s website, the Delano Regional Medical Center employs over 600 staffers, including over 130 physicians, with about 156 hospital beds in the city of Delano, located about 30 miles north of Bakersfield, Calif.

To read more from the EEOC statement on the settlement, click here.