Category: Legal

New federal legislation aimed at getting tough on independent contractor misclassification was introduced September 15 in Congress.

The Fair Playing Field Act of 2010 was introduced by Sen. John Kerry, D-Massachusetts, and Rep. Jim McDermott, D-Washington.

It aims to:
• End the moratorium on Internal Revenue Service guidance addressing worker classification.
• Requires the secretary of the Treasury to issue prospective guidance clarifying the employment status of workers for federal employment tax purposes.
• Requires those who use independent contractors to provide them with a written statement on their federal tax obligations, the labor and employment law protections that do not apply to them and their right to seek a determination from the IRS on their status.
• Raises penalties for misclassification.

“The legislation is timely, as misclassification is an increasing problem, one that puts employers who properly classify their workers at a disadvantage in the marketplace and costs the government billions of dollars in unpaid taxes,” Vice President Joe Biden said in a written statement.

A similar piece of legislation, the Employee Misclassification Prevention Act, was introduced in June.

Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Please note the following copyright guidelines about content, including articles, artwork, and any other materials published within Workforce Management magazine or Workforce online.

Copyright

Copyright © 1992-2004 by Crain Communications, Inc., 1155 Gratiot Ave, Detroit, MI 48207-2997. All rights reserved. Unauthorized distribution or reproduction is forbidden. No material may be published, broadcast, or otherwise distributed without prior written consent of Crain Communications, Inc.

Permission to Republish

Permission to republish or otherwise use material published in Workforce Management magazine (formerly Personnel Journal), Global Workforce, Recruitment Today, or Workforce online is available. All permissions must be obtained in writing. To request permission, contact the Copyright Clearance Center, Inc.: Phone – 978/750-8400; Fax – 978/750-4470; E-Mail – info@copyright.com Authorization to photocopy items for internal or personal use is also granted by Copyright Clearance Center (CCC) on behalf of Crain Communications, Inc. for registered members of the CCC Transactional Reporting Service, provided that the base fee of $2/copy is paid directly to CCC, 222 Rosewood Dr, Danvers, MA, 01923.

Reprints

Reprints of articles are available through Reprint Services on behalf of Crain Communications, Inc. Reprints must be ordered in quantities of 200 or more. Please contact Laura Picariello at 212-210-0762 or lpicariello@crain.com, 711 Third Avenue, New York, NY 10017-4037.

Personal Use

Information is provided for your own personal use. Content may be viewed, copied, printed, or saved for private, non-commercial use only. By so doing, you agree that any copies made shall retain all copyright and proprietary notices held by Crain Communications, Inc.

The owner of a Los Angeles staffing firm and five others were indicted on suspicion of holding approximately 400 Thai workers on farms in Hawaii in conditions of forced labor, according to an indictment filed September 1 in U.S. federal court in Hawaii.

Mordechai Orian, 45, owner of the staffing firm, Global Horizons Manpower Inc., pleaded not guilty, according to court filings. In a statement, the company said it complied with requirements of government agencies.

“Global Horizons never abused, neglected, endangered, exploited or discriminated against their workers,” according to the statement. “The company has always made their best faith efforts to comply with the laws and provide safe, certified working conditions.”

Orian and Pranee Tubchumpol, director of international relations at Global Horizons, face maximum sentences of up to 70 years in prison, according to the FBI.

The incidents allegedly took place from May 2004 through September 2005. Workers had their passports confiscated and were allegedly threatened with arrest and being sent back to Thailand if they did not comply, according to the indictment. In Thailand, the workers would have faced recruitment debts they could not pay off.

Thai workers with incomes of approximately $1,000 U.S. per year were lured to the U.S. with promises of high wages and up to three years of employment, according to the indictment. Workers had to pay fees of $9,500 to $21,000 to gain employment. Some workers took out loans to pay the fees using family land as collateral, according to the indictment. One worker cited a promised wage of $8.72 per hour.

Global Horizon and a firm owned by Chunharutai received portions of the recruitment fees as well as commissions from U.S. growers, according to the indictment.

Others listed in the indictment include Shane Germann, on-site manager; Sam Wongsesanit, an on-site field supervisor; Ratawan Chunharutai, the owner of a Thai-based recruitment firm; and Podjanee Sinchai, the owner of another Thai-based recruitment firm.

Chunharutai faces up to 65 years in prison, while Germann and Wongsesanit face up to 10 years in prison, according to the FBI. Sinchai, who was charged in Thailand with multiple counts of recruitment fraud, faces a maximum sentence of five years in prison if convicted in the U.S.

A trial date of November 3 has been set for Orian, according to court records.

Kara Lujan, a Global Horizons spokeswoman, said there was overkill in the FBI’s handling of the case. FBI agents kicked down the door of Orian’s Malibu, California, home while serving a search warrant; ordered his wife and three children, ages 5, 11 and 13, on the ground at gunpoint; and handcuffed his wife, Lujan said. Orian was not at home when the search warrant was served.

Orian has no criminal record and is not violent, Lujan said. “We just felt it was just overkill,” she said.

Lujan also said Orian did not try to flee and never tried to mislead negotiations for surrender, contrary to other reports. Orian flew to Honolulu and turned himself in to agents at the office of his attorney.  

Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

An Oklahoma City school district employee who was demoted to principal and then replaced by a younger worker with similar responsibilities can pursue her age discrimination suit, a federal appeals court has ruled.

According to Tuesday’s decision by a three-judge panel of the Denver-based 10th U.S. Circuit Court of Appeals in Judy F. Jones v. Oklahoma City Public Schools, Jones was promoted in 2002 to executive director of curriculum and instruction of the school system.

Beginning in 2006, her supervisors asked questions about when she planned to retire. In 2007, when she was 60, Jones was demoted to principal, a position that paid less after her first year and affected her vacation and retirement benefits, according to the decision.

Shortly afterward, the Oklahoma City Public Schools named a 47-year-old woman to a position that had a different title but with a job description and responsibilities that “were quite similar to those of Jones’ former position” overseeing curriculum and instruction.

Jones filed suit in May 2008, alleging that the school system violated the Age Discrimination in Employment Act.

A lower court held that under the U.S. Supreme Court’s 2000 ruling in Roger Reeves v. Sanderson Plumbing Products Inc., it was not sufficient that Jones had established a prima facie case of age discrimination. The lower court “faulted Jones for not providing any ‘additional evidence’ to show that age played a role in the reassignment decision,” the appeals court panel wrote.

The lower court, though, improperly applied the Reeves decision, the appeals court said.

“Showing that [Oklahoma City Public Schools’] reasons for her transfer were pretextual, Jones was under no obligation to provide additional evidence of age discrimination,” the panel ruled, and remanded the case for further proceedings.

Filed by Joanne Wojcik of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

A woman’s “bystander exposure” to asbestos from washing her husband’s work clothes for more than three decades substantially contributed to her mesothelioma, a New Jersey appellate court has ruled in upholding a $7.5 million jury award.

The August 20 ruling in Bonnie Anderson v. A.J. Friedman Supply Co. Inc. upheld a jury award of $7 million for Anderson and $500,000 for her husband, plus prejudgment interest.

The couple brought product liability litigation naming several defendants that manufactured and supplied asbestos, but they went to trial only against Exxon Mobil Corp. after claims against the manufacturers were dismissed.

The plaintiffs alleged that Anderson contracted mesothelioma from one or two sources of asbestos exposure: her own 12-year employment working at an Exxon refinery and from laundering her husband’s asbestos-laden work clothes during his employment with Exxon from 1969 to 2003, according to court records.

Among other defenses, Exxon argued that Anderson’s claim was barred by the exclusive remedy provisions in New Jersey’s workers compensation law.

However, the appellate division of the Superior Court of New Jersey agreed with a trial court analysis that a “dual persona doctrine” applies when an employer undertakes “a completely separate and independent role with respect to the employee,” as was the case with Anderson’s non-occupational asbestos exposure. 

 Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Just a single incident of sexual harassment, if severe enough, can violate federal civil rights law, a federal appellate court said in a decision Monday, August 23.

The decision by the Chicago-based 7th U.S. Circuit Court of Appeals in Cynthia Berry v. Chicago Transit Authority involved a dispute by Berry, who was a carpenter with the CTA, with a fellow worker over a card game in January 2006.

Berry said that after she refused to get up so that a co-worker, Philip Carmichael, could partner with another worker in a game during a morning break, Carmichael grabbed her breasts, lifted her up from a bench and rubbed her buttocks against the front of his body. Berry said that when she landed off-balance with only one leg on the ground, Carmichael pushed her into a fence.

When Berry reported the incident to a manager, he told her he did not care what happened because she was a “pain in the butt,” predicted she would lose her job if she filed charges, and promised he was going to do “whatever it takes to protect the CTA,” the opinion said.

Berry filed suit against the CTA in July 2006, claiming Carmichael’s actions and the manager’s response created a hostile work environment and constituted sex discrimination in violation of Title VII of the Civil Rights Act of 1964. A district court subsequently granted the CTA’s motion for summary judgment dismissing the case.

The appellate court said with respect to Carmichael’s actions, “Berry has provided enough evidence to allow her hostile work environment claim to go forward. As the district court noted, a single act can create a hostile environment if it is severe enough.”

The court also said Berry’s testimony “would allow a reasonable fact finder to conclude” that the manager “maliciously thwarted any legitimate investigation and that the CTA was therefore negligent or worse in responding to her report of harassment.”

The three-judge panel, however, upheld the lower court’s dismissal of Berry’s discrimination and retaliation claims. The case was remanded for further proceedings.

Plaintiff attorney Paul Mollica, a partner with law firm Meites, Mulder, Mollica & Glink in Chicago, said that although the civil rights law establishes that a severe-enough single incident of harassment violates the law, most lawsuits charge either pervasive or severe and pervasive harassment.

“There aren’t a lot of cases like this where a solitary act is evaluated,” he said.  

 Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Employers are entitled to credit an employee’s third-party liability award against future workers’ compensation benefits for which they may be responsible, Connecticut’s Supreme Court said in a ruling released Tuesday, July 13.

In Janice Thomas v. Department of Developmental Services et al., Thomas argued that a lien provision in Connecticut law applies only to workers’ comp benefits that an employer already has paid and not to future benefits.

The provision entitles an employer that is paying workers’ comp benefits to place a lien against any third-party judgment or settlement that an employee receives, court records state.

Thomas filed a workers’ comp claim after falling on an icy sidewalk leading to her workplace in 2004. She also filed a third-party lawsuit that was settled for $45,000.

After the settlement, a dispute arose over the lien issue in Connecticut law.

In 2007, a workers’ compensation commissioner ruled in favor of Thomas, finding the state agency was not entitled to credit her third-party award against future workers’ comp benefits it could be obligated to pay.

But a compensation review board overturned the commissioner’s finding.

In the Tuesday ruling, the Connecticut Supreme Court affirmed the board’s decision, ruling that “well-established public policy” in the law says that “double compensation for an injury is to be avoided.” 

 Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Laid-off employees would again be eligible for federal COBRA premium subsidies under a proposal by Sen. Robert Casey, D-Pennsylvania.

Under the amendment that Casey proposed last week to tax extension legislation, employees laid off from June 1 through November 30 would be eligible for the 65 percent federal premium subsidy for six months.

That is a reduction from the 15-month subsidy extension he proposed earlier.
Senate Democratic leaders have been unable to muster sufficient support to bring the broader bill, H.R. 4213, to a vote by the full Senate. Republicans and some fiscally conservative Democrats oppose the broader bill because it would add to the federal deficit.

However, Senate Finance Committee Chairman Max Baucus, D-Montana, pledged last week to refine the measure to reduce its overall cost and get the 60 votes needed to stop debate and win passage.

It isn’t known how much the latest extension proposal would cost. An earlier proposal to extend the 15-month COBRA subsidy to those laid off through year-end was projected to cost nearly $8 billion, according to congressional budget analysts.

On the Senate floor, Casey said the six-month COBRA subsidy would be fully paid for by a change in the federal earned income tax credit.

While the economy is improving, layoffs are continuing and the extension of the subsidy is needed to ensure that laid-off workers have access to quality health care, Casey said.

The latest COBRA subsidy expired May 31, which means employees involuntarily terminated since June 1 have been ineligible for the subsidy.  

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

A U.S. district judge issued a summary judgment ruling that FedEx Ground and home delivery drivers in Illinois are employees and not independent contractors under the Illinois Wage Act.

The May 28 ruling was the first in the complex FedEx Ground litigation over the classification of drivers as independent contractors, according to law firm Leonard Carder.

“It’s a very important step, but it’s not the end of the road,” said Lynn Rossman Faris, a lead plaintiffs attorney in the case and partner in Leonard Carder.

Other aspects of the Illinois drivers’ case remain for the court to decide. This Illinois case was also not certified as a class action, although that is subject to appeal.

Similar plaintiffs’ motions for summary judgment are pending for drivers in 39 other states, and seven other states have laws similar to Illinois’. The FedEx Ground Package System Inc. litigation includes 63 cases.

The judge ruled that the Illinois drivers were employees because “their delivery work was an essential part of FedEx’s business,” according to Leonard Carder.

The court noted that drivers must wear FedEx uniforms and drive trucks with FedEx logos, that FedEx structures drivers’ routes so that the trucks are in use nine to 11 hours a day, that FedEx must approve replacement drivers and that drivers were required to allow FedEx managers to go on customer service rides annually, according to Leonard Carder.  

Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

 

A plaintiff who brings a statutory sexual harassment claim and a common-law negligent supervision and retention claim can recover only the statutory remedy if both are based on the same facts, the Texas Supreme Court has ruled.

According to the decision Friday, June 11, in Waffle House Inc. v. Cathie Williams, Williams quit her job as a waitress at a Waffle House restaurant in 2002 after unsuccessfully complaining about sexual harassment by a restaurant cook.

A jury found in Williams’ favor on both the statutory sexual harassment claim under the Texas Commission on Human Rights Act as well as the common-law negligent supervision and retention claims.

It awarded her $425,000 in compensatory damages and $3.46 million in punitive damages. The trial court subsequently entered a judgment of $425,000 in compensatory damages and $425,000 in punitive damages.

Williams elected to recover on the common-law claim. Under the statutory claim, she would have received a maximum of $300,000 in compensatory and punitive damages. Waffle House appealed.

The Texas Supreme Court, on a 7-2 vote, overturned an appellate court decision and held that the statutory claim pre-empts the common-law claim “when the complained-of negligence is rooted in facts inseparable from those underlying the alleged harassment.”

The two claims against Waffle House “stem from the same boorish and objectionable conduct,” the high court ruled. “Where the gravamen of a plaintiff’s case is sexual discrimination that lies at the heart of the TCHRA, allowing negligence damages for a TCHRA violation would eclipse the legislature’s prescribed scheme.”

Allowing Williams “to recover on her tort claim would collide with the elaborately crafted statutory scheme, a scheme that, as with the workers compensation regime, incorporates a legislative attempt to balance various interests and concerns of employees and employers,” the high court ruled.

The case was remanded to the appellate court.  

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.