Articles

Most employers probably wouldn’t consider themselves to be “lucky” enough to be cited by OSHA in early 2016, but if they were, it was a lot less expensive than it will be later this summer.  Effective August 1, 2016, the Federal Civil Penalties Inflation Adjustment Act of 2015 requires federal agencies, including OSHA, to make a one-time adjustment of civil penalties to equalize with inflation – the first such adjustment since 1990.  Much like the DOL will do with overtime salary thresholds under the FLSA, the Act also requires the impacted agencies to annually increase penalties for inflation.

The penalties have increased as follows:

Serious, Other-than-Serious, and Failure to Post Violations
Current Maximum Penalty:  $7,000 /violation
New Maximum Penalty:  $12,471/violation

Failure to Abate
Current Maximum Penalty:  $7,000/day beyond the abatement date
New Maximum Penalty:  $12,471/day beyond the abatement date

Willful or Repeated Violations
Current Maximum Penalty:  $70,000/violation
New Maximum Penalty:  $124,709/violation

States that operate their own occupational safety and health programs are required to adopt maximum penalties that are at least as effective as the federal penalties.

By: Jeffrey M. Embleton

On June 27, 2016, U.S. District Judge Sam R. Cummings issued a nationwide injunction blocking enforcement of the Union Persuader Rule which was to take effect on July 1, 2016. This Rule would have required employers and management law firms and consultants to publically report payments for certain advice and consultation that was protected from disclosure for over a half century under the Advice Exemption.  Many business and legal organizations, including the American Bar Association, vigorously objected to this new rule because they claimed it would create ethical and confidentiality issues for lawyers and companies required to disclose lawyers’ advice. In fact, several law firms have announced they would no longer provide union avoidance training or advice based on the new disclosure rules.  This recent decision marks the second ruling in less than a week by two separate federal district courts.  Last week, the U.S. District Court in Minnesota refused to enjoin enforcement of the new rule although the court did find that the plaintiffs (an association of various law firms) were likely to succeed, “in their claim that portions of the new rule conflict with the (Labor-Management Reporting and Disclosure Act of 1959 (LMRDA)).”

The district court in Texas went considerably further, however, when it issued a nationwide injunction blocking enforcement of the new rule.

What the Court said…

In its 90-page opinion, the court spent the first 30 pages detailing the evidence that was presented, including eight witnesses presented on behalf of the consortium of business groups and a number of exhibits. Interestingly, the Department of Labor chose not to call any witnesses or introduce any evidence.  The witnesses included practicing lawyers, a former Board Member from the National Labor Relations Board, the former President of the American Bar Association and other specialists.  The court specifically referenced the American Bar Association’s lengthy opposition to the proposed Persuader Rule and pointed to the ABA’s discussion on the conundrum that lawyers would be faced with in deciding whether to disclose the “advice” given to its employer/clients or choose not to give any advice at all.  The court also noted that the estimates of the cost of compliance in the first year alone ranged from $7.5 billion to $10.6 billion with annualized costs thereafter of $4.3 billion to $6.5 billion, far in excess of the $826,000 calculated by the Department of Labor.  Finally, it concluded that the new Persuader Rule failed on several legal grounds because, the Court found, it is likely that:

-DOL lacked statutory authority to promulgate and enforce the new Advice Exemption Interpretation of the Persuader Rule;

-The new rule is  arbitrary, capricious and an abuse of discretion;

-The new rule violates free speech and association rights protected by the First Amendment of the United States Constitution;

-The new rule is unconstitutionally vague in violation of the Due Process Clause of the Fifth Amendment of the U.S. Constitution;

-The new rule violates the Regulatory Flexibility Act; and

-The plaintiff associations have shown the substantial threat of irreparable harm.

The court thus concluded that a nationwide injunction requiring enforcement of the new rule was appropriate and that such preliminary injunction would stay in place until further order of the court or final resolution of the merits of the case.

What Does This Mean for Employers and Law Firms?

Many law firms and employers were faced with a decision as to whether to enter into new engagement letters before July 1^st covering activities that were to be regulated under the new Persuader Rule or, as some law firms decided, to simply get out of the business of providing advice and strategy on union avoidance.  Fortunately, the district court’s order removes that immediate deadline although it is expected that this case will be appealed to the Federal Court of Appeals.  Thus, it is likely we have not heard the last of this particular case or the challenge over the validity of the new Persuader Rule.  Additionally, there is one more case pending in the U.S. District Court in Arkansas and we are awaiting a ruling from the court which may come very soon.

Employers and practitioners are encouraged to keep a close eye on the court challenges. It may be prudent to move forward and enter into engagement letters specific to union avoidance training and advice out of an abundance of caution although it is unlikely that the DOL will seek to enforce the rule in light of the district court’s ruling in Texas until legal challenges are complete.  We will continue to keep our readers advised as further developments occur.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

On June 2, 2016, the Equal Employment Opportunity Commission issued a Final Rule increasing the penalty to employers for violations of the notice-posting requirements of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, and the Genetic Information Non-Discrimination Act from $210 per violation to $525.  The last increase was in 2014, from $110 to $210.  Employers can expect annual increases hereafter.  Per the Final Rule, periodic inflation adjustments are required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires each federal agency to issue regulations not later than July 1, 2016, and not later than January 15 of every year thereafter, adjusting for inflation the maximum civil penalty that may be imposed pursuant to each of the agency’s statutes, in order to maintain the remedial impact of civil monetary penalties and promote compliance with the law.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.

The Cuyahoga County Court of Common Pleas recently reversed a decision rendered by the City of Cleveland Board of Zoning Appeals which had denied a zoning permit to construct a McDonald’s restaurant in Ohio City on Lorain Avenue. The Court agreed with McDonald’s, represented by Bruce Rinker of Mansour Gavin, who successfully argued that the City’s action was clearly arbitrary and unconstitutional.

The City Planning Commission had initially denied the application, “reasoning” that the proposed development would have an adverse impact on nearby pedestrian-oriented retail uses due to a presumed increase in vehicular traffic. One year and three costly traffic analyses later (spec’d by the City’s own experts) comprehensive evidence refuted those fears. Nor was it lost on the court that officials cynically disregarded the evidence anyway.

Despite strident political opposition voiced by neighboring witnesses who crowded into both the Planning Commission and BZA hearings, the Court found that no evidence existed to show that the project would adversely impact the pedestrian-oriented character of the neighborhood. In fact, the Court held that compelling evidence proved just the opposite. Finding that the City’s zoning code had merely been used as a pretext to deny expressly-permitted uses–where neither a variance nor any other use condition was required–the Court reversed the Board’s decision. Pointedly, the Court warned that the City’s three and one-half year stranglehold on the property was plainly unconstitutional.

For more information, please contact Mansour Gavin’s Real Estate and Land Use Practice Group.

LEGAL DISCLAIMER

 The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.

Further Limitations Recognized in Employer Intentional Tort Claims

 An Ohio appellate court recently affirmed a more restrictive definition of an “equipment safety guard” in the context of an intentional tort suit in McQuillen v. Feecorp Industrial Services.  Ohio’s Intentional Tort Statute, Ohio Revised Code section 2745.01, allows an employee to recover economic and noneconomic damages by showing the employer committed a tortious act with the intent to injure or with the belief that the injury was substantially certain to occur. “Substantially certain” is defined as a specific or deliberate intent to cause injury. R.C. § 2745.01(B). A rebuttable presumption is created in favor of the employee if the employer deliberately removed an equipment safety guard or deliberately misrepresented a toxic or hazardous substance. R.C. § 2745.01(C). The legislature has not defined an “equipment safety guard” or “deliberate removal” for purposes of R.C. § 2745.01(C). Ohio Courts, interpreting the statute, have continually limited the meaning of an “equipment safety guard”, which has in turn restricted employee’s recovery in employer intentional tort claims.

The Ohio Supreme Court adopted the Sixth Appellate District’s definition of an “equipment safety guard” as a “device that is designed to shield the operator from exposure to or injury by a dangerous aspect of the equipment.” Fickle v. Conversion Technologies International. In a subsequent decision, Hewitt v. L.E. Myers Co., the Court further elaborated that any generic safety-related item will not be considered as an “equipment safety guard.”

Following that decision, the Fifth Appellate District, in Beary v. Larry Murphy Dump Truck Serv., Inc., narrowly construed the definition of an “equipment safety guard” when it determined that a backup alarm on a Bobcat loader vehicle, which was not properly sounding, was not an “equipment safety guard” for purposes of R.C. § 2745.01(C). “While the backup alarm may make the skid street safer, it does not shield the operator or a bystander from exposure to or injury by a dangerous aspect of the skid steer.”

Recently, the Fifth Appellate District, in McQuillen v. Feecorp Industrial Services, once again further limited the definition of an “equipment safety guard.” The court analyzed whether a lanyard-assisted “safety T” (a device that can be installed onto a vacuum hose at a point within 50 feet of the opening that would allow a user to automatically shut off the hose) was an “equipment safety guard.” The court compared the “safety T” to a remote cut-off switch, which is often found connected to various types of industrial machines. The court found that the mere existence of the “safety T” does not shield the operating employee from injury but rather, the operating employee’s action to engage the “safety T” is what provides a safety shield. The court held that the “safety T” in question did not constitute an “equipment safety guard” and therefore, plaintiff was unable to establish a rebuttable presumption of an intentional tort.

It is worth noting that Judge Hoffman’s dissenting opinion in McQuillen identifies that the appellate court’s interpretation of an “equipment safety guard” was “overly restrictive” that the use of the term “shield” is a verb, not a noun and “to shield” means “to protect from.” Following this reasoning, Judge Hoffman stated that the operating employee’s “need to take a proactive step to engage the safety T on an as-needed basis does nothing to detract from its intended purpose to shield the operator from injury.”

Despite these additional restrictions that Ohio Courts have recognized in employer intentional torts, employers should still take precaution to guard against the possibility of these claims. Employers should train their employees about the importance of safety guards and the dangers of toxic and hazardous substances, as well as have a system in place to inspect all equipment to ensure that safety guards are in the proper place.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

By:      Edward O. Patton

Suppliers and importers of overseas goods should take immediate notice of a new federal law, the Trade Facilitation and Trade Enforcement Act of 2015, which went into effect in March. Trade Facilitation and Trade Enforcement Act of 2015 now officially prohibits the importation of goods produced by forced labor or child labor, closing an 86 year old loophole and reauthorizing the Customs and Border Protection Agency to seize any imports suspected of being produced by forced labor. The timing of the Trade Act coincide with changes to the Federal Acquisition Regulations and DFARS that  greatly strengthen anti –trafficking prohibitions and compliance requirements.

What Does the New Trade Law Prohibit?

The Trade Law prohibits importing into the U.S. goods that are produced, manufactured, or mined by forced, indentured, or convict laborers. The Trade Law effectively ends the loophole that previously existed under the U.S. Tariff Act of 1930 which previously permitted, if consumer demand exceeded domestic production, the importing of goods made with forced labor. Because demand in many sectors of the U.S. economy often exceeded domestic production, this loophole often permitted the importing of such goods. However, with the 2015 Act now in effect, this loophole was closed and now goods can be seized.

Changes to the Federal Acquisition Regulations and DFARS that greatly strengthen anti –trafficking prohibitions require that contractors and subcontractors supplying the Federal government have anti trafficking compliance programs.

 Who Does the Law Apply To?

All importations into the U.S. and   to any   company that is a subcontractor or supplier to a Federal contract.

What Does This Mean for Importers of Overseas Goods?

The 2015 Trade Law places more pressure on suppliers and importers to scrutinize their supply chains and develop compliance systems to ensure forced indentured, or convict laborers are not producing their imports. The law also allows any interested party to request the U.S. Customs and Border Protection to investigate imports to determine if they were produced with forced labor in a foreign country. Interested parties will likely turn to the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor and Executive Order 13126 to identify potential goods when making their requests. Goods found to be produced, in whole or in part, with forced labor can be excluded and/or seized. Further, such a finding can compel the investigation of the importer itself.

What does this mean for Suppliers to Federal Contracts?

All Federal contractors and subcontractors are prohibited from engaging in trafficking activities and are required to implement and certify compliance to a formal compliance plan. A plan must include procedures for preventing agents and subcontractors from engaging in trafficking in person and  for monitoring, detecting and terminating  those who engage in the prohibited activities.

What Should Suppliers and Importers Do to Comply?

With these changes in mind, it is very important that importers and suppliers to Federal contracts or contractors work to limit the risks under federal law. As a result of the new legislation, companies should implement a   policy and/or compliance plan to meet the revised laws  because  of Federal Contract  “flow down” provisions which require compliance at all levels of a  Federal contract  or subcontractor regardless of dollar values so that even lower tier contractors  require compliance.     Companies should implement a screening program to deter their supply chain from engaging in the prohibited conduct.

For more information on this matter and how to best limit such risks and ensure compliance with the 2015 Act, please contact Mansour Gavin’s Corporate and Business Services Group.

LEGAL DISCLAIMER

 In Steak ‘n Shake, Inc. v. Warren Cty. Bd. of Revision, the Ohio Supreme Court explained proper appraisal methodology when using leased properties as comparable sales in valuing unleased, owner-occupied properties. On appeal, Steak ‘n Shake — the owner-occupier — asked the Court to review the County’s appraiser’s failure to adjust his comparable sales to account for the fact that the comparables were all subject to long-term leases.

Reversing the BTA and remanding the case for further proceedings, the Court recognized that leases generally enhance the value of real estate. Thus, “sale prices of leased properties generally must be adjusted when determining the value of comparable unleased properties” like the Steak ‘n Shake property. The Court noted the County’s appraisal failed to “remove the effect that long-term leases would have” and recognized that “[s]ince the property at issue was unencumbered by a lease, it would likely have sold for less.” The Court also rejected the County’s argument that Steak ‘n Shake fell within the special-purpose doctrine, which is generally applied to distinctive yet highly useful structures being used for the unique purpose for which they were built (think Wal-Mart) in order to prevent an owner from escaping full property tax liability.  In other words, buildings such as the Steak ‘n Shake are readily saleable on the open market for other purposes.

If you own unleased property and are seeking a property tax reduction, be cognizant of improper appraisal methodology in competing appraisals. For more information on this and other real estate matters, please contact Mansour Gavin’s Real Estate and Land Use Practice Group.

LEGAL DISCLAIMER

The Ohio Supreme Court announced that subcontractors enrolled in a self-insured construction project will now find immunity from tort claims made by employees of a different enrolled-subcontractor who are injured or killed while working on the self-insured project and whose injury, illness, or death is compensable under Ohio’s workers’ compensation law.

In Stolz v. J & B Steel Erectors, Inc., The Supreme Court was asked by the US District Court for the Southern District of Ohio, Western Division for clarification on the question of whether “Ohio Rev. Code §§ 4123.35 and 4123.74 provide immunity to subcontractors enrolled in a Workers’ Compensation self-insurance plan from tort claims made by employees of [other] enrolled subcontractors injured while working on the self-insured project.”   In the case before the Federal District Court, plaintiff, an employee for one subcontractor, sued another subcontractor for injuries allegedly caused by the second subcontractor’s negligence. The general contractor had obtained authority to be a self-ensuring employer on the project under R.C. 4123.35(O) and therefore was required to provide workers’ compensation coverage for both its own employees and those of enrolled subcontractors working on the casino construction project. The plaintiff’s employer, a subcontractor, and other subcontractors were enrolled subcontractors.

The Supreme Court answered the question of whether subcontractors enrolled in a Workers’ Compensation self-insurance plan are immune from tort claims made by employees of other enrolled subcontractors injured while working on the self-insured project in the affirmative and held that the subcontractor which allegedly caused the injuries was immune from liability for the claims because it was an enrolled subcontractor. The Court reasoned the statutes created a “legal fiction” wherein a “self-insuring employer is the employer of all covered employees, including employees of enrolled subcontractors, for purposes of workers’ compensation.” This legal fiction, according to the Court, therefore “made clear that for purposes of workers’ compensation, enrolled subcontractors do not have employees working on the construction project.” Thus, the general contractor, not the enrolled subcontractor-employer, is liable for workplace injuries of the enrolled subcontractor’s employees; the enrolled subcontractor is immune. Additionally, referencing tort law, the Court concluded that “a worker who may be compensated with workers’ compensation benefits is prevented from suing a co-employee (any other employee on the job site who is enrolled in the self-insuring employer’s plan), and thus the worker cannot seek to hold the co-employee’s actual employer vicariously liable in order to recover damages in tort.” For these reasons, the Court concluded, enrolled subcontractors were immune from claims of employees of other enrolled subcontractors who were injured or killed while working on the project so long as the event is compensable under Ohio’s workers’ compensation laws.

For more information on this and other matters, please contact Mansour Gavin’s Civil Litigation Group.

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.

Last month, the DOL published proposed rules establishing paid sick leave for federal contractors in accordance with Executive Order 13706 signed by President Obama. The deadline for comments on the proposed rules has been extended to April 12, 2016. A renewal of the Healthy Families Act objectives, the goal is to provide employees working on federal contracts with at least 7 days of paid leave for illness or family care.

Scope. The proposed rules would apply to employees who work on or in connection with new federal contracts awarded on or after Jan. 1, 2017 covered by the Service Contract Act or the Davis-Bacon Act, concessions contracts and service contracts in connection with federal property or lands. In short, contract coverage would be the same as Executive Order 13658, Establishing a Minimum Wage for Contractors, provided the employee spends at least 20% of their working hours in a particular workweek performing work in connection with a covered contract.

Absences Covered.  There are a broad set of limitations in which paid sick leave may be used by an employee resulting in absence. Further, the use of paid sick leave cannot be contingent on the employee seeking paid sick leave to find a replacement. Absences that will result in paid sick leave will include:

*  Physical or mental illness, injury, or medical condition;

*  Obtaining diagnosis, care, or preventative care from a health care provider;

*  Caring for a child, parent, spouse, a domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship, who has any of the conditions or needs for diagnosis, care, or preventative care described above, or is otherwise in need of care.

The regulations also expand paid sick leave for an illness, injury or condition of the employee, or for the employee to obtain care for an illness, injury or condition, where the condition or care results from domestic violence, sexual assault, or stalking; for those seeking assistance from a victim services organization or to prepare or commence legal action as a consequence of domestic violence, sexual assault, or stalking; or to assist an individual related to the employee who is a family member who undertakes any of these actions as a result of domestic violence, sexual assault or stalking.

Requirements for requesting leave. Under the proposed regulations, paid sick leave shall be provided upon the oral or written request of an employee that includes the expected duration of the leave, and is made at least seven (7) calendar days in advance where the need for the leave is foreseeable, and in other cases as soon as is practicable.

Employer Responsibilities. The proposed rule provides two options for accruing paid sick leave, an accrual method and a “lump-sum” method. Under the accrual method, the employee will accrue not less than one hour of paid sick leave for every 30 hours worked on all covered contracts plus nonworking time on which the employee is paid. For full-time exempt employees, accruals can be calculated on actual hours worked (if tracked) or on an assumed 40 hours worked each workweek. Under the “lump sum” method, an employee must be provided with at least 56 hours of paid sick leave at the beginning of each accrual year. Paid sick leave will carry over from one accrual year to the next and carried over sick leave will not count toward any limit the contractor sets on annual accrual. However, an employer can place a limit on the amount of paid sick time an employee can accrue, provided that the cap is not less than 56 hours of paid sick leave per accrual year. The proposed rule allows the employer to select the 12-month period to use as the accrual year.

Further, the proposed rule requires federal contractor employers to inform their employees of their accrued sick leave balances no less than monthly.

Enforcement. No private right of action is created under the proposed regulations. Complaints for noncompliance must go through the DOL’s administrative process. Penalties can include backpay and reinstatement of last wages and benefits, liquidated damages in an amount equal to all other monetary relief ordered, and debarment.

While many employers already provide paid sick leave benefits, those who are federal contractors are encouraged to review their policies in light of the proposed regulations and either amend their existing policy or be prepared to adopt a new paid sick leave policy. For further information, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.