Federal Contractors May Lose Contracts Because of Labor and Employment Law Violations

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And here we go again. We have noted that the National Labor Relations Board is aggressively expanding employee protections and organized labor opportunities, that the EEOC has decided to claim many common provisions of separation and settlement agreements are unlawful, and that the Obama Administration has decided the overtime exemptions under the Federal Labor Standards Act need to be dialed back. If you are keeping score, you can add these up to reach the reasonable conclusion that there is a clear executive branch policy seeking to expand and protect employees through non-legislative means. The most recent domino in this bigger policy lineup affecting federal contractors has just fallen. Continue reading this entry

Food, Folks, and Franchise-Wide Liability: NLRB Signals Intent to Pound Square Joint Employer Peg Into Round Franchise Hole

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A big part of what makes the franchise model of business attractive to small business owners is the opportunity to own and operate their own business, but with their entrepreneurial risk backstopped by a known regional or national brand. In turn, the franchisor facilitates the success of its franchisees by providing varying degrees of uniformity to franchise operations as a whole, from which both the franchisor and the franchisees benefit economically. Conceptually and legally however, the franchisor and the franchisee operate separate businesses, and each must achieve success through its own efforts. This longstanding and widely used business model has just come under attack to the possible significant benefit of agitating employees and labor unions. Continue reading this entry

Micro Unions Are Here to Stay: Cosmetics Workers Made Up for Unionizing but Shoes Salespeople Need to Find a Better Fit

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The question – or controversy, depending on who you talk to – about the propriety of “micro-units” or “micro-unions” has been a pressing issue for employers since the National Labor Relations Board issued its Specialty Healthcare decision in 2011. The concern has been that unions, as a way of getting a foot in the door at a non-union employer, would petition to represent arbitrarily defined small groups covering only those employees who supported the union to win an election where the majority of a more readily apparent “community of interest” does not support unionization. Though the Board claimed Specialty Healthcare did not create new criteria for defining appropriate bargaining units outside the healthcare industry, the dissent from that decision was direct in saying “Make no mistake. Today’s decision fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry under the Board’s jurisdiction.” Two decisions recently issued by the Board suggest that the dissent’s prognostication in Specialty Healthcare was correct, but they may also give some hope to employers that their union-free workforces cannot be penetrated through blatant “micro-unit” gerrymandering to ensure the union delivers itself an election victory. Continue reading this entry

Avoiding Fines by Starting the I-9 Process Early. Just Not Too Early…

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As we have noted in prior posts, Immigration and Customs Enforcement (“ICE”) has been aggressively pursuing I-9 inspections and imposing record fines (about $12.5 million per year) as part of its multi-year strategic plan. Employers should not turn a blind eye to this uptick in enforcement activity and would be wise to fight back by improving their compliance. One of the top concerns must be timely completion of the Form I-9 Employment Eligibility Verification. An employer has a very short period in which to complete the I-9 process with the new hire: by the first day of employment for section 1 (the employee’s section) and by the third business day after employment begins for section 2 (the employer’s section). Late I-9 Forms constitute substantive violations. An employer cannot avoid a substantive violation by arguing that it tried to comply in good faith. Continue reading this entry

Staying on Top of Federal Contractor Regulations

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Earlier this year, the OFCCP began enforcement of extensive amended regulations on Affirmative Action Plans (AAP) and recordkeeping requirements for both protected veterans (VEVRRA) and persons with disabilities (Section 503). These regulations require significant modification to existing AAP, including new requirements for data collection, outreach, and training, “benchmarks” and goals. Companies and entities dealing with federal contractors or subcontractors doing business with the federal government are required to comply with OFCCP regulations. While some of these obligations can be delayed until the 2015 “transition” AAP, others should already be implemented. Continue reading this entry