By now, most federal contractors are aware of the new regulations that go into effect on March 24 requiring federal contractors and subcontractors to take affirmative action to recruit, hire, promote, and retain protected veterans and individuals with disabilities

What many contractors may not realize is that as of July 1, 2013, they also became covered by federal whistleblower regulations. The National Defense Authorization Act for Fiscal Year 2013 created a pilot program mandating that all employees working for contractors, grantees, subcontractors, and subgrantees be protected by federal whistleblower law for all federal grants and contracts entered into after July 1, 2013.

Essentially, contractors and subcontractors may not discharge, demote, or otherwise discriminate against an employee as a reprisal for disclosing to a government agent or body information about behavior that the employee reasonably believes constitutes:

• Gross mismanagement of a federal contract or grant;
• A gross waste of federal funds;
• An abuse of authority related to federal funds;
• A substantial and specific danger to public health or safety; or
• A violation of law, rule or regulation.

Contractors are required to inform their employees, in writing, of the rights and remedies provided under the whistleblower laws and that employees are subject to whistleblower rights and remedies. This four-year pilot program applies to all grants, contracts, subgrants, and subcontracts issued through January 1, 2017.

In order to be protected under the law, the employee must make a report to a Member of Congress, a representative of a Congressional Committee, an Inspector General, the Government Accountability Office, a federal employee responsible for contract or grant oversight at the relevant agency, an authorized official of the Department of Justice or other law enforcement agency, a court or grand jury, or a management official or other employee of the contractor, subcontractor, or grantee who has the responsibility to investigate discover, or address misconduct.

Employers with grants, contracts, and subcontracts from the federal government should take the time to make sure that their employees know they may report suspected fraud, waste, or abuse to the government without fear of retaliation by their employers.
 

In last night’s State of the Union Address, President Barack Obama announced that he planned to sign an Executive Order requiring that employees of federal contractors be paid at least a minimum wage of $10.10 per hour. This represents a $2.85 increase over the current federal and Pennsylvania minimum wage of $7.25 per hour. Specifically, the President said, "In the coming weeks I will issue an executive order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour because if you cook our troops’ meals or wash their dishes, you should not have to live in poverty."

President Obama’s Executive Order will only impact new and renewed contracts so there will be no immediate impact on federal contractors. According to a report from the Associated Press, more than 90% of federal contractors already make over $10.10 and the Executive Order will only impact about 200,000 workers. It is expected that the President will use this Executive Order in an effort to goad Congress into raising the minimum wage for all American workers to $10.10 over the next three years and then index it to inflation thereafter. The President told Congress that raising the minimum wage for all will "give businesses customers . . . more money to spend. It does not involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise."

14 states raised their minimum wage effective January 1, 2014. While Pennsylvania did not raise the minimum wage, neighboring Ohio raised the minimum wage to $7.95 per hour and New Jersey raised the minimum wage to $8.25 per hour. California will raise its minimum wage to $9.00 per hour in July and is scheduled to raise it to $10.00 per hour in January 2016. Washington has the highest state minimum wage at $9.32 per hour and San Francisco comes in with the highest minimum wage in the country at a whopping $10.74.

A recent Associated Press poll found that 55% of Americans support an increase in the minimum wage, 21% oppose it, and 23% are neutral.

Federal contractors and subcontractors should be aware of these new requirements and prepare and price their bids accordingly as they enter into and renew existing contracts with the federal government. All employers should follow the news closely in the coming months as Congress considers increases to the minimum wage nationwide.

In addition to the upcoming minimum wage changes, many federal contractors and subcontractors are aware that beginning on March 24, 2014, in addition to their responsibilities to collect employee and applicant demographic data regarding race, gender, and ethnicity, contractors will also be required to collect demographic data related to veteran and disability status. If you are a contractor and these changes sound completely foreign to you, be sure to attend the McNees Wallace & Nurick seminar entitled "Counting Heads: New Rules That Impact EVERY Federal Government Contractor and Subcontractor." Seminars will take place in Harrisburg, PA on January 30 and State College, PA on February 6. A seminar will take place in Scranton, PA on February 26 (details to be announced soon). See below for more information. To sign up, e-mail us here!


 

On Monday, January 27, 2014, the United States Supreme Court unanimously ruled that a group of unionized steel workers at U.S. Steel Corporation did not need to be compensated for the time they spent "donning and doffing" safety gear before and after work. Justice Antonin Scalia wrote for the majority in Sandifer v. United States Steel Corp., Case No. 12-417 (Jan. 27, 2014), a case he described as requiring the Court to determine the meaning of the phrase "changing clothes" under section 203(o) of the Fair Labor Standards Act (FLSA). Although section 203(o) applies only to employers with collective bargaining agreements, certain aspects of the decision could have broader implications in "hours worked" cases under the FLSA.

Plaintiff Clifton Sandifer led a class-action suit representing a group of current and former employees of a U.S. Steel facility in Indiana. The Plaintiffs sought to recover backpay for time spent "donning and doffing" protective gear that U.S. Steel required employees to wear due to hazards encountered working in steel mills. Protective gear cited by the Plaintiffs included flame-retardant jackets, work gloves, leggings, "metatarsal boots" and respirators. Under the terms of the applicable collective bargaining agreement between U.S. Steel and the union, the time spent dressing and undressing was not compensable.

Section 203(o) of the FLSA provides that "any time spent in changing clothes or washing at the beginning or end of each workday" may be determined by a collective bargaining agreement. While the Sandifer Plaintiffs recognized that their collective bargaining agreement stated that dressing and undressing was noncompensible, they argued that the donning and doffing of protective safety gear does not qualify as "changing clothes" and thus must be compensated. The Supreme Court rejected this argument but left the door open to future claims where the protective gear is less like clothing and more like equipment.

To determine whether the protective gear in question was "clothes", Justice Scalia turned to his orignalist roots and examined the dictionary definition of clothing from the time Section 203(o) was passed in the late 1940s. Quoting Webster’s Dictionary, Scalia stated that "clothes" are "items that are both designed and used to cover the body and are commonly regarded as articles of dress". It is important to note that the Court did not go so far as to define "clothes" as "essentially anything worn on the body—including accessories, tools, and so forth." The Court’s definition of clothes "leaves room for distinguishing between clothes and wearable items that are not clothes, such as some equipment and devices."

Justice Scalia found that the items at issue in the case fell within the definition of clothes, except for items like glasses, earplugs, and respirators which are not typically considered articles of dress. The Court then examined whether the donning of items like earplugs and respirators could be considered de minimis and, thus, noncompensable. While Justice Scalia did not apply the de minimis doctrine, he ultimately concluded that the time spent putting on the clothes and other protective gear could, on the whole, be characterized as "time spent changing clothes," even though some of the items fell outside the definition of clothes. The Court concluded: "If an employee devotes the vast majority of the time in question to putting on and off equipment or other non-clothes items (perhaps a diver’s suit and tank) the entire period would not qualify as “time spent in changing clothes” under §203(o), even if some clothes items were donned and doffed as well. But if the vast majority of the time is spent in donning and doffing “clothes” as we have defined that term, the entire period qualifies, and the time spent putting on and off other items need not be subtracted."

Employers with unionized employees should make sure that the compensability of time spent changing clothes is covered under their collective bargaining agreement. Such employers should also assess the activities that take place during noncompensible time to confirm that a majority of this time is spent washing and changing "clothing" as defined by the Supreme Court. If most of the time spent by workers relates to donning and doffing equipment, rather than clothing, failure to compensate for this time could result in liability. Finally, we also suggest that all employers consider whether the Court’s treatment of the meaning of the term de minimis under the FLSA might require any changes to time keeping procedures.
 

This post was contributed by Jennifer E. Will, Esq., a Member in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Harrisburg, Pennsylvania. 

So, have you implemented a Bring Your Own Device policy yet? If not (and your employees are using their personal devices for business purposes), your organization may be at risk.

The governor’s aide at the heart of the New Jersey bridge debacle used her personal Yahoo! email account to send the infamous emails which led to the closure of three lanes of the George Washington Bridge in September. Those emails were not initially provided in response to an open records request from a New Jersey newspaper. Should they have been disclosed?

Whether you are in the public or private sector, there are lessons to be learned from New Jersey.
 

Continue Reading BYOD Lessons From Jersey’s Bridge Scandal

Recently, Adam R. Long, a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Group, prepared a White Paper regarding Wage and Hour Compliance Priorities for 2014.

Employers should conduct regular and comprehensive wage and hour audits that examine all facets of the employer’s pay practices to ensure compliance with the myriad wage and hour laws. That said, we recognize that HR professionals, in-house counsel, and senior management have very limited time and resources to devote to wage and hour compliance. This complimentary white paper discusses specific areas where employers should focus their wage and hour compliance efforts in 2014.
 

Click to view the entire white paper.

A National Labor Relations Board (NLRB) Administrative Law Judge (ALJ) recently concluded that an employer violated the National Labor Relations Act (Act) by implementing a "no gossip policy" and by firing an employee who violated the policy. The case, Laurus Technical Institute, involved a non-union employer. As we have reported before, the NLRB’s jurisdiction covers union and non-union employers alike. We have also talked with you about the NLRB’s aggressive approach to policing employer workplace policies. You have been warned!

It appears that in this case, after an employee filed a charge challenging her termination for unsatisfactory work performance and various policy violations, the NLRB’s General Counsel’s office included an additional charge challenging the employer’s "no gossip policy."

The "no gossip policy" was implemented to address a number of workplace problems, problems that you are probably familiar with! The policy provided that gossip would not be tolerated. The policy also prohibited employees from engaging in gossip about the company, other employees or customers and stated that employees who violated the policy would be subject to disciplinary action. The policy defined gossip in a number of different ways, including: "talking about a person’s personal life when they are not present; talking about a person’s professional life without his/her permission; and creating, sharing or repeating rumors about another person, that are overheard or that constitute hearsay."

The ALJ found that the policy violated the Act because it was overly broad and essentially banned any discussion of an employee’s professional life and negative comments/criticisms of other employees. The ALJ found that, as a result, the policy prohibited employees from discussing the terms and conditions of employment, which is an activity clearly protected by the Act. The ALJ concluded that because the policy contained no narrowing or clarifying language, and did it further define any terms, the policy was unlawful.

That last part is interesting to us, because the NLRB has repeatedly emphasized the importance of clarifying language in policies, and has encouraged employers to carefully define terms. It looks to us like the employer in this case gave that a shot, and one could argue that the employer did define gossip carefully. One could also argue that a reasonable reading of the policy would render it lawful. Obviously, the ALJ did not see it that way.

The ALJ also concluded that, because the employee who brought the complaint was terminated, in part, for violating the policy, her termination was also a violation of the Act. The ALJ ordered that the employee be made whole.

This decision is another in a series of decisions attacking employer workplace policies. Unfortunately, this trend is likely to continue. Employers should not simply throw up their hands and give up, however. Instead, employers should work with counsel to careful draft policies and procedures. In addition, employers should continue to closely scrutinize termination decisions that may involve protected activity under the Act.

This post was contributed by Tony D. Dick, Esq., an attorney in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Columbus, Ohio.

The U.S. Supreme Court issued a rare unanimous decision earlier this week finding that employee benefit plans can set reasonable time limitations on when a plan participant may bring a lawsuit seeking plan benefits – even when the time limitation is shorter than what would otherwise be permitted under the Employee Retirement Income Security Act of 1974 (ERISA) and analogous state statutes.

In Heimeshoff v. Hartford Life & Accident Ins. Co., Case No. 12-729 (Dec. 16, 2013), Petitioner Julie Heimeshoff, a long-term Wal-Mart executive, began to suffer from a multitude of ailments caused by fibromyalgia. As a result, in August 2005, she filed a claim for disability benefits with the plan administrator for Wal-Mart’s disability plan – Hartford Life & Accident Insurance Co. On December 8, 2005, after considering the medical evidence offered by Ms. Heimeshoff, Hartford denied her claim for failure to provide sufficient proof of loss.

Ms. Heimeshoff subsequently filed an internal appeal of the denial of her claim with Hartford as she was required to do under the plan. On November 25, 2007, Hartford ultimately upheld its decision to deny disability benefits to Ms. Heimeshoff and informed her that she had exhausted her administrative remedies. On November 18, 2010, Ms. Heimeshoff filed suit in federal court seeking judicial review of the denial of her claim pursuant to ERISA Section 502(a)(1)(B). Hartford moved to dismiss the case arguing that, pursuant to the terms of the relevant disability plan, Ms. Heimeshoff was required to file suit within three years from the time proof of loss was due under the plan. In this case, that would have been no later than December 8, 2008. Ms. Heimeshoff argued in response that despite the plan language modifying the time to bring suit, the three-year limitations period should run from November 25, 2007 – the date on which the plan upheld its final denial of her claim for benefits.

The Court determined that although a statute of limitations typically begins to run when a claim actually accrues (usually after the final denial of benefits by the plan administrator in the ERISA context), parties are perfectly within their rights to modify the applicable statute of limitations so long as the modified time limitation is reasonable. Justice Thomas, writing for the Court, concluded that “in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action on such contract to a period less than that prescribed in the general statute of limitations, provided that the shorter period itself is a reasonable period.”

Obviously, the Supreme Court’s decision is a major victory for ERISA plans and their employer sponsors. In light of the decision, plan sponsors should give consideration to amending plan documents to include a statute of limitations provision similar to the one in Heimeshoff. Beyond the ERISA context, however, the Court’s decision may serve as a clear endorsement of suit limitation provisions in general and falls in line with similar decisions from various lower courts. For example, just last year, the Sixth Circuit Court of Appeals held in Oswald v. BAE Industries, Inc., 483 Fed.Appx. 30 (6th Cir. 2012) that private employers may enter into agreements with their employees to shorten the applicable statute of limitations for employment claims to as little as six months. If you have not done so already, now might be a good time to engage counsel to determine whether such suit limitation provisions make sense for your business.
 

Continue Reading U.S. Supreme Court Upholds ERISA Plans’ Modified Statute of Limitations

We here at the McNees Wallace & Nurick Labor and Employment Law Group have been busy preparing for the holiday season. Just last week we were able to celebrate with family and friends at our annual holiday party.

While holiday parties can be great fun, hosting a holiday party or placing holiday decorations in or around the office can raise a whole host of legal concerns including religious discrimination or harassment claims, sexual harassment claims, or workers compensation concerns. Michael R. Kelley, Esq., Chair of McNees Wallace & Nurick LLC’s Insurance Recovery & Counseling Group has written in the past about serving alcohol at holiday parties and we wanted to take a few moments to remind you about the potential legal ramifications of serving alcohol at your holiday party.

Let’s say that you are having a holiday party (with alcohol served) at your home, or you are a business owner and have a voluntary "company" party for your employees. If someone becomes "visibly intoxicated" at your party, are you as the host of the party liable if the visibly intoxicated guest leaves your party and injures himself or someone else? Does your homeowners or commercial liability policy cover you for defense costs and for a settlement or judgment if you get sued? What about worker’s comp coverage for your employees?

In Pennsylvania, the courts have ruled that the Dram Shop Act (which covers alcohol-related liabilities) limits liability for serving intoxicated persons to only those who serve for money, unless the servee is under 21. So, social and business hosts that are not in the business of providing alcohol for money can definitely be civilly liable for serving persons under 21 years of age. However, social and business hosts are generally not liable under the Dram Shop Act for serving alcohol to those 21 and older. But, courts leave open the possibility of a common law action for negligence if a social or business host serves a visibly intoxicated person and knows or should know that the person will be driving, or engaging in some other dangerous activity.

The answer to the insurance coverage question depends on your specific coverages. In some cases, unless you specifically purchased liquor liability coverage, your homeowners and commercial liability policies will not cover you if you are sued under either the Dram Shop Act or the common law. Check your insurance policy. If "liquor liability" is a specific exclusion, you are not covered. If the policy is silent on this, you are covered. This is an area of coverage that has evolved over time, so make sure to check your policy. We recommend having insurance for liquor liability claims if you plan to spike the egg-nog this holiday season.

If an employee becomes intoxicated and is subsequently injured after attending a "voluntary" company party, there is a question as to whether your worker’s compensation policy will cover it. If the party is truly voluntary, the claim may not be covered. If, despite being "voluntary," employees are expected to attend the party and it is seen by employees as having an impact on their employment status, worker’s comp coverage likely will cover the injuries. Based on experience, courts look to find worker’s comp coverage in these scenarios and only deny coverage if employees clearly were not required to attend and attendance had no bearing on employment status.

So, what is a good social or business host to do? Make sure that your guests don’t have too much to drink this holiday season, and, if they do, make sure that they have a safe ride home. It’s not only good sense, it’s good insurance sense too. Also, make sure you have liquor liability coverage on your homeowners or commercial liability policy – just in case.

From everybody in the Labor & Employment Group, we wish you a happy and healthy holiday season!
 

This post was contributed by Tony D. Dick, Esq., an attorney in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Columbus, Ohio.

In just a few short years, electronic-cigarettes (also known as “e-cigarettes” or “vapes”) have become a burgeoning industry in the United States. In case you are like me and are always last to know about the latest trends, e-cigarettes are essentially battery-powered devices that heat a liquid nicotine solution until it turns into a vapor mist that can be inhaled by users. They are available in a variety of exotic flavors, including Apple Pie, Bubble Gum, Cotton Candy, and Mint Chocolate Chip, and are used by young and old alike. Though few studies have been conducted on the long-term health risks or benefits of e-cigarettes, proponents of the product argue that they are a better alternative to traditional cigarettes because users inhale fewer harmful chemicals, there is no open flame involved, and the vapor cloud created from using the product does not have a distinctive odor and dissipates rather quickly.

Though they are not officially classified as cessation devices, e-cigarettes have quickly become the most popular smoking cessation product on the market – topping both nicotine patches and nicotine gum. It is projected that e-cigarettes will rake in close to $2 billion in sales this year alone – more than doubling sales for 2012. They have become so popular that it is estimated that within the next 10 to 15 years, the sale of e-cigarettes will actually surpass the sale of traditional cigarettes.

It should be clear then that if you have not already had an employee ask to use an e-cigarette in the workplace, that day is coming. The question for employers is whether they should allow the use of these products at work or ban them like traditional cigarettes. Because e-cigarettes do not contain tobacco, they are not covered under either Pennsylvania’s Clean Indoor Air Act, or Ohio’s Smoke-Free Workplace Act. Accordingly, employers are free to set their own rules and policies concerning the use of e-cigarettes at work based on their particular preferences and priorities.

Those who advocate for their use in the workplace claim that e-cigarettes can help increase employee productivity by eliminating the need for frequent outdoor smoke breaks during the day. They also suggest that e-cigarettes can be a helpful tool for those who wish to quit smoking altogether, thereby helping to decrease the employer’s healthcare costs. On the flip side, opponents of e-cigarettes argue that, while there are no known health risks associated with e-cigarettes, this is because the product is still in its infancy. They point out that e-cigarettes still contain nicotine and at least trace amounts of carcinogens which may be harmful to the user and those around them. Opponents also argue that banning e-cigarettes in the workplace eliminates the possibility of complaints from other employees and customers who may be annoyed or uncomfortable with the vapor that e-cigarettes emit.

As the usage of e-cigarettes continues to increase and more becomes known about their effects, state and local laws may be passed that limit or ban their use in public places and the workplace. Employers should pay special attention to any future developments. In the meantime, employers should determine their position on the use of e-cigarettes in the workplace and clearly communicate that position to their employees in their existing smoking policies.

This post was contributed by Adam Santucci, Esq., an Associate in McNees Wallace & Nurick LLC’s Labor & Employment Law Group.

The National Football League ("NFL") has hired an outside investigator to handle the complaint made by Jonathan Martin, an offensive lineman for the Miami Dolphins. The national news media cannot seem to get enough of this story, and the coverage has been relentless. The media, however, seems to have focused on the bullying angle. But for some of us, based on the reports, it looks like there was more than just bullying going on. If the allegations are true there may be violations of the league’s workplace harassment policy as well. Given the dynamics here, and the high profile nature of the situation, we think it makes a lot of sense for the NFL (and the union) to bring in an investigator from the outside.

An employer’s investigation of workplace harassment is often critical to its subsequent defense of any related lawsuits. A good investigation that results in appropriate corrective action typically means a good defense to a claim of workplace harassment. The law encourages employers to be proactive and promptly investigate incidents that occur and rewards employers who take those steps.

But who should conduct the investigation?

We often talk about this issue with our clients: who is the best person to investigate a complaint of workplace harassment? The answer is, it depends. In many instances, a fresh perspective is helpful. In others, using an investigator familiar with the players may be better.

  • Will this investigator be a good witness if necessary? As noted above, the investigation itself may be an issue in any subsequent litigation and the investigator may become a witness, so pick a good one!
  • Will the investigator be able to represent the employer if there is a lawsuit? In some instances, counsel who serves as the investigator may not be able to defend the case.
  • Is this a particularly difficult situation? Outside investigators often have experience in handling difficult cases, including cases that involve employees at the upper levels of the organization.
  • Is there an allegation that involves the Human Resources Department?
  • Evidence created by the investigation may be discoverable in subsequent litigation.
  • The use of an outside investigator may strengthen the appearance of impartiality.

Also keep in mind that the investigator must be impartial (and viewed as impartial) to be effective, and must be familiar with your policies. The investigator must also be a good communicator, because educating those involved during the process is important. You may even want to consider using two investigators in appropriate cases.

As the NFL situation indicates, picking an investigator is important, and there are certainly times when it is in an employer’s best interest to use an investigator from outside of the organization.