The Department of Energy (DOE) has proposed an amendment to the Department of Energy Acquisition Regulation (DEAR) that, among other changes, clarifies that FAR Subpart 22.12, Nondisplacement of Qualified Workers Under Service Contracts, and the associated Department of Labor regulations, applies to subcontracts under DOE’s management and operating (M&O) contracts. M&O contractors and their subcontractors need to be aware of these changes, particularly the impact on the requirement to hire service employees working on incumbent contracts set forth in contract clause FAR 52.222-17.
FAR Subpart 22.12 implements Executive Order 13495 (January 30, 2009), and requires a successor contractor and its subcontractors to offer “service employees,” as defined by the Service Contract Act, under the predecessor contract (of the same or similar services at the same location) and whose employment will be terminated as a result of the successor contract award, a right of first refusal of employment under the new contract. Employment openings are generally prohibited until such right of refusal has been provided, meaning an incoming contractor will have limited opportunity to staff its current employees on the contract. Importantly, each bona fide express offer of employment must have a stated time limit of not less than 10 days for an employee response, a time period that successor contractors should account for when determining how long it will take to transition the contract. The contract clause, FAR 52.222-17, has to be flowed down to service subcontracts over the simplified acquisition threshold, typically $150,000. The requirements of FAR Subpart 22.12 do not apply to service contracts performed entirely outside the United States. 77 Fed. Reg. 75768 (Dec. 21, 2012).
The General Counsel for the National Labor Relations Board (the “Board”) recently revealed the Board’s policy initiatives for 2016 in a memorandum to local regional offices. The memo informs the NLRB regions which cases it considers to be of particular concern and requires that they be submitted to the Division of Advice at the Board’s Washington, D.C. headquarters so the General Counsel’s office may “provide a clear and consistent interpretation of the [National Labor Relations] Act” that is consistent with the General Counsel’s view. While the memo contains few surprises, it does offer employers a cautionary warning of possible changes to current labor law jurisprudence. Because these changes may negatively impact employers, employers would be wise to take note of its warnings.
A number of significant developments in California labor and employment law occurred in 2015. This article will highlight the developments we believe are most important for California employers, including a new mandatory paid sick leave law, a substantial overhaul of the Fair Pay Act, the solidification of special meal period waivers for healthcare employees, the prohibition of certain no-hire clauses in California settlement agreements, and a few others.
California Paid Sick Leave Laws
On July 1, 2015, California became the second state in the nation (following Connecticut) to implement a mandatory paid sick leave law and the first state in the nation to require paid sick leave for all employers. Unlike Connecticut, there is no small employer carve out.
Employers often must balance the mandates of seemingly competing directives. A challenging example arises in the area of possible mental impairment. An employer may hear concerns that an employee is acting abnormally, or has hinted at a desire to hurt herself, or is exhibiting other possible signs of mental impairment. The employer does not wish to stereotype the employee unfairly, or unlawfully “regard” the employee as disabled; yet, the employer also must ensure a safe work environment for other employees and others on the premises. Continue Reading
On Thursday, February 25, 2016, the U.S. Department of Labor proposed new rules to implement Executive Order 13706, which requires certain federal contractors to provide qualifying employees with at least seven days of paid sick leave each year, including paid leave for family care. The Department of Labor intends to publish a final version of these rules by September 30, 2016, and employers who contract with the federal government should begin preparing for their implementation now. Noncompliance could result in suspension of federal payments or even termination of a federal contract. Continue Reading
The EEOC recently announced two new lawsuits it has filed alleging that employers have violated Title VII’s protections against gender bias to include prohibitions against sexual orientation bias. The lawsuits are not very surprising in light of the EEOC’s position last July, in Baldwin v. Department of Transportation. There, in a case involving a federal employee, the EEOC took the position that discrimination against a person based on sexual orientation is, by its nature, discrimination on the basis of sex. Continue Reading
An Indiana Federal Court Judge recently ruled that NCAA student-athletes are not employees and thus do not have a claim for minimum wage payments. In Anderson et al. v. NCAA et al., three former track athletes claimed that, as student-athletes, they really should be treated as student interns and that under the Department of Labor guidance issued in 2010, the athletes were more akin to employees, entitled to minimum wage pay.
District Judge William T. Lawrence disagreed and dismissed the wage lawsuit against several defendants, including the NCAA and the University of Pennsylvania. The Judge determined that the athletes’ attempt to use the guidance for interns was not instructive for, and should not be followed in the case of, student-athletes. The Judge also noted that universities having thousands of student-athletes who are unpaid is not a secret but yet the Department of Labor has not issued guidance directly addressing them or claiming that the minimum wage laws apply to student-athletes.
Counsel for the student-athletes vowed to appeal the ruling.
In a February 4, 2016, decision, United States ex rel. Wall v. Circle C. Construction, LLC, the Sixth Circuit summarily rejected the government’s assertion that the measure of damages in a False Claims Act (FCA) suit involving a violation of prevailing wage rate requirements was the total amount paid for the work. The Sixth Circuit’s rejection of the “total contract value” theory of damages in the prevailing wage rate context is a welcome development for FCA defendants who are faced with increasingly creative damages theories asserted by the government and the relator’s bar.
Circle C’s Army Contract
For a case that involved a relatively minor non-compliance with the prevailing wage rate requirements applicable to federal construction contracts, the Circle C. Construction case has a long history. Circle C entered into a contract to construct warehouses at the U.S. Army base at Fort Campbell, located in Kentucky and Tennessee. Pursuant to the Davis-Bacon Act, Circle C was required to pay electrical workers at least $19.19 per hour, plus a fringe benefit rate of $3.94 per hour. Circle C was also required to submit certified payroll for itself and its subcontractors.
In an article published on January 5, 2016, Law360 summarized the details of the employment class action case, Morton v. Vanderbilt. Bass, Berry & Sims attorneys Bill Ozier and Michael Moschel represented Vanderbilt in the lawsuit. Continue Reading
Bass, Berry & Sims attorney Michael Moschel provided insight for an article in Becker’s Hospital Review detailing the use of social media in the workplace. While the article focuses on social media within the context of a hospital setting, the general principles are applicable across a variety of industries. In the article, Michael outlines five helpful tips for employers to follow when utilizing social media:
- Focus on business purposes.
- Don’t follow a subordinate on social media.
- Implement some type of centralized management of the hospital’s disciplinary policy for social media.
- Have a compliant social media policy in place and train employees on it.
- No double standards.
The full article, “Managing Social Media in the Workplace: 5 Thoughts for Hospital Executives,” was published by Becker’s Hospital Review on December 31, 2015 and is available online.