It’s Internship Time!

Contributed by Carlos Arévalo, April 27, 2017

56243229 - interns wanted internship training trainee concept

Interns sitting next to a sign that says “Interns Wanted”

It’s that time of the year when college students will come knocking looking for a job or an internship. Depending on the nature of an organization’s business, an unpaid intern might be a great idea. But before organizations start engaging summer intern help, they need to make sure that they are complying with the Department of Labor (DOL) requirements, which include the following six factor test:

  • The internship is similar to training that would be offered in an education environment;
  • The internship experience is for the benefit of the intern;
  • The internship is not displacing a regular employee;
  • The training provided by the employer to the intern may impede employer’s operations;
  • The intern is not expecting a permanent position at the conclusion of the internship; and
  • Both the employer and intern understand that there is no compensation.

Assuming all of these apply, the Fair Labor Standards Act (FLSA) is not triggered and the intern need not be paid minimum wage or overtime. While there are limited exceptions applicable to local government agencies or those who volunteer their time without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations, the six-factor test is generally applicable to most organizations.

In 2015, however, the federal second circuit court issued a decision in a case involving an unpaid intern for the award winning movie Black Swan. There, the court established a more employer-friendly test heavily focused on training, integration of coursework and receipt of academic credit, accommodation to the intern’s academic calendar and the duration of the program as it related to beneficial learning. The court also emphasized that a clear understanding must exists that there is no expectation of compensation. This test was subsequently adopted by the eleventh circuit in August 2016. To date, the DOL has not amended the six-factor test.

Thus, as organizations develop internship programs, special care must be taken to ensure that it is the intern who is drawing the benefit from the program as opposed to the company. In other words, the focus should be on the intern attaining valuable and useful skills and experience in his chosen discipline instead of the company aiming to receive “free labor.” To avoid slipups, interns should not be engaged in menial tasks that can be performed by clerks or other administrative personnel already on board. Such tasks might include making copies, fetching coffee, delivering mail or running errands. Rather, interns should be assigned to career related tasks – for instance an IT intern might assist staff in performing backup and maintenance functions or update user and technical documentation.

Congress has made it clear that its intent is not to discourage volunteerism or to prevent willing individuals from attaining skills and training by serving as unpaid interns. Nevertheless, managers in charge of internship program development should be mindful of the DOL requirements and consult experienced counsel to ensure compliance and design internship programs that truly benefit participants.

Before You Acquire That Business, Understand the NLRB’s Successor Bar Doctrine

Contributed by Beverly Alfon, April 24, 2017

handshake over contract

Two business people shaking hands over a contract

When a change of ownership occurs for a business that employs individuals who are represented by an incumbent union, the new owner must be aware of the National Labor Relations Board’s (NLRB) successor bar doctrine.  It used to be that following a sale or a merger of a business, there was a window of time during which employees, the new employer, or a rival union, could challenge a union’s majority status as representative of those employees. However, in 2011, the NLRB modified the doctrine in UGL-UNICCO Service Co., 357 NLRB No. 76 (Aug. 26, 2011), holding that for stability, the new relationship between the successor employer and incumbent union should be insulated from challenges for a reasonable period of time (6 months if the new employer adopts the previous terms and conditions; 6-12 months if the new employer sets new terms and conditions).

A few weeks ago, a federal appellate court in NLRB v. Lily Transportation Corp. (1st Cir. March 31, 2017), affirmed the revised successor bar doctrine, holding that the NLRB had a sound basis to implement it. The court also held that the NLRB properly applied that revised successor bar doctrine in finding that Lily Transportation unlawfully refused to bargain with a union that represented a group of truck drivers at a newly acquired facility.

Lily argued to the board that less than a month after it took over operations, it received signed statements from a majority of drivers indicating that they no longer wanted to be represented by the union. Lily argued that the successor bar would force a union upon the employees who had clearly rejected it. The NLRB rejected the argument and required Lily to negotiate with the union.

On appeal, Lily challenged the validity of the successor bar doctrine itself. It argued that the NLRB should be required to provide reasoned explanation for the change in precedent. The court rejected the arguments, reasoning:

The greater the number of successor situations with unionized employees, the greater the potential volatility in union-management relationships across the national labor market. The greater the level of that instability, the greater the likelihood of precipitate disruption in litigation challenging union support during the unsettled period with the new employer.

Bottom line: NLRB activism or not, the modified successor bar doctrine has survived the scrutiny of a federal appellate court. Employers must carefully evaluate all potential labor and employment issues prior to the acquisition of any business.

NLRB Decision Reminds Employers to Tread Cautiously Amidst Union Push

Contributed by Suzanne Newcomb, April 20, 2017

On April 13, 2017 the National Labor Relations Board (NLRB) set aside a vote defeating a union organizing campaign and ordered a new election because the workforce could have perceived management’s statements as impermissible promises to provide benefits if they voted down the union (see full decision here).

44905665 - hand put voting paper in ballot box. voting flat conceptDuring a unionizing campaign, management held a meeting in which it advised employees that another facility’s employees received a 12% pay raise the pay period after they rejected union representation. Management explained that the raises were the result of a survey of wages in that geographical area and stated that the company was in the early stages of conducting a similar survey in their area. All of these statements were true.

Management then opined that if the union won the election, any pay raise could take “a whole lot longer” – perhaps 6 months, a year, 18 months, and that there was a “really big chance” that they might not get the raise at all or could end up losing money. Finally, management added that although they were not promising anything, they planned to follow the same process and therefore, a “reasonable man” could expect a 12% increase.

A PowerPoint presentation shown during the meeting stated that the company was not making promises, the wage survey would continue regardless of the election outcome, the collective-bargaining process could result in wages going up or down or remaining the same, and included a hypothetical in which the union won the election and employees received a 12% raise.

The NLRB concluded that despite repeatedly stating that they were not making any promises, management implied that employees would receive a benefit if they defeated the union. Quoting a 1978 decision, the NLRB stated: “it is immaterial that an employer professes that he cannot make any promises, if in fact he expressly or impliedly indicates that specific benefits will be granted.

All employers are prohibited from interfering with, restraining, or coercing employees regarding their right to join a union. Prohibited conduct includes:

  • Providing or promising (expressly or implicitly) to provide benefits in an effort to thwart the unionization effort;
  • Withholding benefits that would have been provided absent the unionization campaign;
  • Taking or threatening adverse action for union involvement or sympathies;
  • Questioning employees about their union loyalties or that of their co-workers; and
  • Spying on union activities.

This list is not exhaustive. If you suspect an organizing campaign, exercise extreme caution and seek expert advice immediately.

U.S. Citizenship and Immigration Services and Department of Labor Announce Further Measures to Detect H-1B Visa Fraud and Tighten Rules

Contributed by Jacqueline Lentini McCullough, April 18, 2017

While the H-1B petitions submitted for the lottery this cap season were still in transit to the U.S. Citizenship and Immigration Services (USCIS), both the USCIS and the Department of Labor (DOL) announced several measures aimed at detecting H-1B visa fraud and abuses.

  1. 43431121 - book with words immigration law and glasses.

    Book with words Immigration Law and glasses 

    Beginning April 3, 2017, USCIS is taking a more targeted approach when making site visits across the country to H-1B petitioners and the worksites of H-1B employees. The focus will be on the following: (1) cases where USCIS cannot validate an employer’s basic business information through commercially available data; (2) H-1B dependent employers; and (3) employers petitioning for H-1B workers who are off-site at another company or organization’s location. Employers should be prepared to implement internal policies to mitigate risk exposure.

  2. On March 31, 2017, USCIS issued a memorandum making it harder for companies to bring foreign workers to the U.S. using the H-1B visa. The new guidelines require additional information for computer programmers applying for the work visa to show that the position is a specialty occupation requiring advanced knowledge and experience. The new policy is effective immediately, so it will impact the visas currently in the pipeline for the annual lottery process.
  3. On April 5, 2017, the DOL announced that it plans to protect American workers from discrimination efforts by abusing or misusing H-1B visas through the following measures:
    • Rigorously using all its authority to begin investigations of H-1B program violators by using further investigation and if necessary, prosecution.
    • Considering changes to LCA for future application cycles (application may be updated to provide greater transparency to all).
    • Continue to engage stakeholders on how the program may be improved to provide better protections for U.S. workers under existing authorities or through legislative changes.

To help detect or prevent abuse, the DOL has also set up an email address which allows anyone to contact them if they feel they or someone they know have been a victim of H-1B fraud.  (REPORTH1BABUSE@USCIS.DHS.GOV).

As more information becomes available regarding how these announcements will be implemented, we will keep you abreast of any changes. Under political pressure, the policy direction is for increased scrutiny of the H-1B visa category by both USCIS and the DOL. Internal compliance practices may need to be reviewed to ensure your company is following the most recent guidelines moving forward.

OSHA Violations Lead to Criminal Indictments and $1,475,000.00 Proposed Penalties

Contributed by Patrick Sanders, April 14, 2017

An OSHA investigation concluded on April 11, 2017 found that Atlantic Drain Service Company, Inc. failed to train its employees to recognize and avoid cave-in and collapse hazards, and failed to provide basic safeguards against trench collapse.  Two Atlantic Drain Company employees died on October 21, 2016 in Boston when a trench collapsed which ruptured an adjacent fire hydrant supply line filling the 12 foot deep trench with water in a matter of seconds.

In announcing $1,475,813 in proposed penalties for 18 willful, repeat, serious and other violations, OSHA determined that both Atlantic Drain and its owner (who oversaw the work the day of the fatalities):

  • Failed to install a support system to fully protect employees in the 12’ deep trench from cave-in and an adjacent fire hydrant supply line from collapsing;
  • Failed to remove employees from the hazardous conditions in the trench;
  • Failed to train the workers on how to identify and address hazards associated with trenching and excavation;
  • Failed to provide an escape ladder at all times; and
  • Failed to provide support structures in and next to the trench for overhead hazards.

You can find the full citations here.

OSHA, the US Solicitor, the Inspector General, Boston Police Department Homicide Unit and Suffolk County District Attorney’s Office all coordinated to investigate and obtain indictments of both Atlantic Drain and its owner on two counts each of manslaughter. More information can be read here on the Suffolk County District Attorney’s office website.

“The deaths of these two men could have and should have been prevented” said Galen Blanton, OSHA’s New England Regional Administrator. He also noted that Atlantic Drain had previously been cited by OSHA in 2007 and 2012 for similar trenching violations and knew what safeguards were needed to protect its employees, but apparently chose to ignore its responsibility.

As we start the spring construction season, this case is an important reminder to employers that all employees need to be fully trained on all hazards associated with the work they are preforming, and that workplace supervision needs to be trained and they also need to be supervised to ensure consistent enforcement of all workplace safety standards.

Contractors should remember the walls of an unprotected trench can collapse suddenly and with great force trapping and engulfing workers before they have a chance to react or escape. Contractors must provide effective protection against cave in hazards by properly shoring the trench walls, sloping the soil, or by deploying appropriate protective trench box technology.

Not providing a means of escape (ladders) was an aggravating factor, especially when high pressure firefighting water supply lines were known to be embedded in the immediate vicinity of the trench.

The case should also remind all employers, especially those organizations that have a record of serious violations, that OSHA will rigorously enforce the employee training, workplace safety information, and periodic retraining provisions of all safety regulations with repeat, willful and in extreme cases, criminal violations, should subsequent violations be documented by OSHA.

Save the Date! Complimentary Webinar on May 11th: Are You Compliant with the ADA’s Current Guidelines?

Join Michael Wong on Thursday, May 11 at 12:00 PM CT for the latest installment of our Labor & Employment Quarterly Series as he discusses ADA compliance for businesses and in the workplace. Over the past few years the courts, EEOC and U.S. Department of Justice have broadened the scope of the Americans with Disabilities Act (ADA) to increase the expectations on business owners, HR professionals, and supervisors – including through the broad interpretation of what is a disability, what information puts supervisors and businesses on notice of an employee’s disability, and the requirement that private businesses have accessible websites.

What does this mean for HR professionals and business owners? Join Michael Wong as he covers:

  • The ADA Interactive Process and reasonable accommodations
  • ADA website compliance
  • How to limit exposure and liability

Click here to register for this webinar!

Seventh Circuit Issues Landmark Decision Holding that Title VII Prohibits Discrimination Based on Sexual Orientation

Contributed by Allison Sues, April 7, 2017

On April 4, 2017, the United States Court of Appeals for the Seventh Circuit, sitting en banc, held that discrimination based on sexual orientation is a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964. The seventh circuit decision is significant as the first of its kind. The United States Supreme Court has never ruled whether Title VII prohibits discrimination based on sexual orientation, and the seventh circuit, as well as the other United States Circuit Courts of Appeals had previously established a long line of precedent holding that claims alleging sexual orientation discrimination fail to state a claim under Title VII.

16306823 - 3d illustration of scales of justice and gavel on orange background

llustration of scales of justice and gavel on orange background

In Hively v. Ivy Tech Community College of Indiana, Kimberly Hively, a lesbian, worked as a part-time adjunct professor. She believed that Ivy Tech discriminated against her because of her sexual orientation when they denied her applications for full-time positions and later failed to renew her part-time teaching contract. Hively filed a Title VII lawsuit alleging sexual orientation discrimination, and the district court dismissed the case for failure to state a claim. The seventh circuit originally heard Hively’s appeal and a panel of three judges affirmed the district court’s decision, holding that it was bound by prior precedent. A majority of judges sitting on the seventh circuit voted to rehear the case en banc, enabling the court to overrule its prior decisions.

In reaching its holding that Title VII’s proscription against sex discrimination includes mistreatment based on sexual orientation, the majority noted that Title VII cases already preclude discrimination based on associating with someone of a protected class. The majority cited an eleventh circuit case holding that discriminating against an employee because of his interracial marriage is a form of race discrimination under Title VII as an example. The majority also reasoned that Hively alleged discrimination based on her sex because she claimed that Ivy Tech would not have denied her promotions or terminated her employment if she were a man in a romantic relationship with a woman. The majority equated discrimination based on sexual orientation to discrimination based on gender non-conformity, which the Supreme Court had previously ruled was a type of sex discrimination. Specifically, in Price Waterhouse v. Hopkins, the Supreme Court held that gender stereotyping, such as discriminating against a woman because she is perceived as too manly, is prohibited under Title VII, and in Oncale v. Sundowner Offshore Services, Inc., the Court held that same-sex harassment is prohibited under Title VII. Judge Posner’s concurring opinion added that changing societal norms justify updated interpretations of federal law. The dissent criticized the majority for overstepping the role of the judiciary, arguing that any change in the meaning of sex discrimination needed to come from Congress.

Ivy Tech has indicated that it will not appeal the decision to the Supreme Court and instead plans to defend the case on its merits following the remand to the trial court. Therefore, Hively will be the law of Illinois, Indiana, and Wisconsin until a different sexual orientation discrimination case makes it way to the Supreme Court – an event likely to happen now that there is clear division between the circuit courts on this issue.

Employers in Illinois and Wisconsin should already maintain policies prohibiting discrimination based on sexual orientation because Illinois and Wisconsin state law prohibit this type of discrimination. Nevertheless, all employers, especially private employers in Indiana who are not currently bound by a state sexual orientation non-discrimination law, should ensure that all employee handbooks, non-discrimination policies, and job application forms explicitly state that the company will not discriminate based on sexual orientation, and should train management and human resources personnel on the same. Following the reasoning of Hively, employers should be cautious to guard against discrimination or harassment based not only on sexual orientation, but also sexual identity.