AGC's Human Resource and Labor News - September 12, 2012 / Issue No. 5-12 (Print All Articles)

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Register for AGC’s HR and TED Conferences and Federal Construction HR Workshop – Hotel Discount Ends September 14

There is still time to register for AGC’s 2012 HR Professionals Conference, Training, Education & Development (TED) Conference, and Federal Construction HR Workshop, but the hotel discount ends Friday, Sept. 14, so act fast.  Room rates are just $119 per night.

There is still time to register for AGC’s 2012 HR Professionals Conference, Training, Education & Development (TED) Conference, and Federal Construction HR Workshop, but the hotel discount ends Friday, Sept. 14, so act fast.  Room rates are just $119 per night.

Both conferences will take place at the St. Anthony Riverwalk Wyndham Hotel in San Antonio, Texas, with the TED Conference beginning on Oct. 15, lasting to midday on Oct. 16, and the HR Professionals Conference beginning on the morning of Oct. 16, and concluding at noon on Oct. 17.  There will be one joint session on the morning of Oct. 16 with a keynote address by Joe Gerstandt on Putting Authenticity, Integrity and Daring to Work.  Both conferences offer unique opportunities for HR, training and workforce development professionals in the construction industry.

The TED Conference will open with an interesting session called “Training is for Dogs” where attendees will learn how to use the latest neuroscience and learning technologies to create true behavioral change.  The Conference will also offer sessions on informal learning, using social media to extend the classroom to the field, and more.  Construction industry training and HR expert Kris Talynn of Okland Construction will share best practices for developing effective job aids as well as tips for diagnosing the root causes and possible solutions for performance problems in the workplace.  Expected to be a highlight of the TED Conference is a panel session called “Creatively Filling the Gap.”  During this session, Todd Hess of Todd Hess Building, Laura Cataldo of AGC of Wisconsin, Katie Igoe of Turner Construction, and Ron Kubitz of Brayman Construction will share best practices for developing and recruiting the construction industry’s future workforce.

On the opening day of the HR Professionals Conference, Paul Samuels, executive vice president for Kimmel & Associates, will share the results of a study on the upcoming shortage of construction project managers and supervisors and how contractors can get prepared.  Other sessions for the HR Professionals Conference will address issues related to background checks and pre-employment screening, employment law changes that affect construction, managing a construction company crisis, conflict management, creating a talent development program, conducting a comprehensive self-audit, and more.    There will also be engaging roundtable sessions for peer-to-peer learning on how to thrive in an HR department of one, partnering with AGC chapters on local and state matters, making 360 evaluations work, and more.

Back by popular demand is the Federal Construction HR Workshop, which will be held the afternoon of Oct. 17 and the morning of Oct. 18, directly after the HR Professionals Conference. This workshop is designed to help staff responsible for compliance on federal and federally assisted projects by providing practical information and best-practice advice from experts and peers experienced in the area.  Attorney and former administrator of the U.S. Department of Labor’s Wage and Hour Division (DOL), Tammy McCutchen, will kick off the Workshop with a session to help attendees understand and respond to DOL’s “attack” on the construction industry.  Immediately following the opening session, attendees will focus on issues related to the Office of Federal Contract Compliance Programs (OFCCP).  Attendees will get a view inside of an OFCCP audit, as well as hear how one construction company became one of the top veteran recruiters in the country.  Attendees will also learn tips for meeting recruitment goals for women in construction.

Day two of the workshop focuses solely on the Davis-Bacon and Related Acts.  Tamika Carter of AGC will open the second day encouraging contractors to “get involved” and affect Davis-Bacon wage rates.  Then, attorney David Fortney of Fortney & Scott, LLP, will share the details and outcome of recent Davis-Bacon-related cases that contractors should be aware of, including penalties and contractors’ rights.  The workshop will close with author of AGC’s Davis-Bacon Compliance Manual for Federal and Federally Assisted Construction, Deborah Wilder, demonstrating the best ways to calculate lodging and travel time, fringe benefits rates, overtime, and how to accurately complete the certified payroll form.  Attendees can register for this workshop alone or in conjunction with the HR Professionals Conference to receive a special discount.

In addition to the valuable learning opportunities each conference will present, participants will be eligible for the following HR Certification Institute (HRCI) credits: TED, 8.25; HR, 11.00; and federal workshop, 7.50.

Find complete session descriptions, schedule, registration, and hotel information at www.agc.org/HR_TED.


AGC Webinar Discusses Importance of HR and Safety Collaboration

On September 5, 2012, AGC hosted a webinar on the Essential Safety Matters for HR:  Working Together to Keep Employees Safe and the Company Litigation-Free.  An on-demand version of the webinar is available for purchase from the AGC Bookstore.

On September 5, 2012, AGC hosted a webinar on the Essential Safety Matters for HR:  Working Together to Keep Employees Safe and the Company Litigation-Free.  An on-demand version of the webinar is available for purchase from the AGC Bookstore

Both HR and safety managers have a responsibility to work together to keep employees safe.  There is also a responsibility to do so while complying with various, often conflicting legal and regulatory requirements such as those governed by the Occupational Safety and Health Administration (OSHA), the Americans with Disabilities Act (ADA), and workers’ compensation requirements.   Similarly, failure to understand OSHA’s emphasis on whistleblower and retaliation claims, as it applies to safety-related discipline and incentive plans, can create an expensive trap for the unwary.  Each time an employee is evaluated for fitness-for-duty, sustains an on-the-job injury, or requests injury-related leave or modified duty, HR and safety managers must carefully coordinate their actions.  When collaboration doesn’t exist, regulatory actions and litigation can result, costing the company time, money and harm to its reputation.

During the webinar, attorney Howard Mavity of Fisher & Phillips, LLP, drew from his experiences as a labor and employment attorney handling more than 400 workplace fatality cases to explain the importance of collaboration between the HR and safety departments.  Specifically for HR professionals, Mr. Mavity described several factors, and even provided sample interviewing questions, that HR professionals must consider for a prospective safety manager during the hiring process.  Mr. Mavity also explained the importance of defining expectations and communicating regularly with the safety manager, who is often the front-line representative of the company for employees, vendors, subcontractors, and regulatory officials.

The webinar addressed key points for HR managers to consider, such as how to:

  • Recognize HR’s role in critical safety management areas, including responding to employee complaints, safety-related discharges, fitness-for-duty and injury-related scenarios;
  • Audit basic HR policies for retaliation, ADA, and OSHA exposure;
  • Respond to state and federal OSHA safety and whistleblower investigations;
  • Develop an integrated safety and HR process in order to minimize physical and legal risks;
  • Train project supervisors to more effectively counsel, evaluate, and discipline poor performers; and
  • Handle fitness-for-duty and recordkeeping procedures with ease.

The webinar concluded with several tips for developing an integrated safety and HR process, training project supervisors to effectively evaluate and discipline poor performers and handling fitness-for-duty and recordkeeping procedures with ease. 

For more information on safety matters for the construction industry, visit AGC’s Safety and Health as well as AGC’s Labor and HR Topical Resources web page.  From the latter, select the main category “Other HR Issues” and the subcategories “Safety Communications” and “Safety Incentives.”


AGC-Sponsored Study Shows OFCCP Data Do Not Support Proposed Rules

On Aug. 1, 2012, the Center for Corporate Equality (CCE), a national nonprofit research organization, released the results of an AGC co-sponsored study of data related to the enforcement of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act.  The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) enforces both of those laws and has recently proposed significant changes to their implementing regulations.  CCE’s report concludes that “discrimination against protected veterans and individuals with disabilities, especially with regard to hiring, is not a frequent finding by OFCCP and may not support the major shift in policy that the proposed regulations would necessitate.”

On Aug. 1, 2012, the Center for Corporate Equality (CCE), a national nonprofit research organization, released the results of an AGC co-sponsored study of data related to the enforcement of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act.  The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) enforces both of those laws and has recently proposed significant changes to their implementing regulations.  CCE’s report concludes that “discrimination against protected veterans and individuals with disabilities, especially with regard to hiring, is not a frequent finding by OFCCP and may not support the major shift in policy that the proposed regulations would necessitate.”

According to the report, between September 2004 and June 2012, OFCCP received and investigated 1,124 veteran and disability-related complaints.  Ninety-five percent of those investigations concluded “without a finding of discrimination.”  Similarly, between 2007 and 2011, OFCCP conducted 22,104 routine compliance evaluations that resulted in only three findings of alleged discrimination, or approximately 0.014 percent of all reviews.  Of the violations that were found, the report shares that the “vast majority” were technical violations, such as a failure to keep required records, as opposed to violations indicating systemic discrimination, such as in hiring.   CCE noted that data were not available from 2004-2006, but it has requested the data from OFCCP.

OFCCP’s proposed rules would increase the affirmative action and nondiscrimination obligations of federal contractors with regard to veterans and individuals.   For example, for the first time, companies would be required to establish numerical hiring benchmarks for veterans and set a 7 percent utilization goal for disabled workers.  In addition, each rule would require new data collection, recordkeeping, job listing and outreach by contractors.

In a letter to OFCCP and the Office of Management and Budget’s Office of Information and Regulatory Affairs, AGC shared the results of the study and asked that they are considered during the rulemaking process.

For more information on the individuals with disabilities proposed rule, click here. For more information on the veterans proposed rule, click here.


Federal Contractors to Report Executive Compensation & Subcontractor Awards Under New Rule

A final rule to implement a Federal Funding Accountability and Transparency Act requirement affecting federal contractors will go into effect on Aug. 27, 2012. Under the new rule promulgated by the Federal Acquisition Regulation (FAR) Council, federal contractors will be required to report the names and total compensation of the five most highly compensated officers under certain circumstances, as well as awards to first-tier subcontractors above $25,000.

A final rule to implement a Federal Funding Accountability and Transparency Act requirement affecting federal contractors will go into effect on Aug. 27, 2012. Under the new rule promulgated by the Federal Acquisition Regulation (FAR) Council, federal contractors will be required to report the names and total compensation of the five most highly compensated officers under certain circumstances, as well as awards to first-tier subcontractors above $25,000.

The new FAR section 52.204-10 burdens prime contractors with reporting not only their top five paid executives, but also their first-tier subcontractor’s top five paid executives when the subcontract has a value of $25,000 or more. A prime contractor must report this information for itself and/or for its first-tier subcontractor when either contractor received: (1) 80 percent or more of its annual gross revenues from federal contracts, subcontracts, and other forms of federal financial assistance and (2) $25 million or more of its annual gross revenues from federal contracts, subcontracts, and other forms of federal financial assistance. Executive compensation need not be reported if the public has access to the information through certain periodic reports filed under the Securities Exchange Act of 1934 or the Internal Revenue Code.

When the FAR Council first solicited comments on the interim rule in 2010, AGC expressed its concerns with the potential burden on federal contractors. Among those concerns, AGC noted that many small business contractors lack the infrastructure to track such information and that primes should not be responsible for reporting subcontractor information. In the comments to the final rule, the FAR Council admits the financial burden and further clarified the definition of “first-tier subcontractor.” However, the Council did not alter the prime’s duty to report the subcontractor information, stating that “[t]he Federal Government has no privity of contract with subcontractors and is therefore reluctant to establish communication channels that could potentially be construed as creating a contractual relationship.”

For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org.


OFCCP Clarifies Internet Applicant and Record-Keeping Rules

Recently, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) added twelve new questions to its Frequently Asked Questions (FAQs) on the Internet Applicant Recordkeeping Rule. The new information is intended to clarify the OFCCP recordkeeping requirements of federal contractors and subcontractors.  The rule originally went into effect in 2006.

Recently, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) added twelve new questions to its Frequently Asked Questions (FAQs) on the Internet Applicant Recordkeeping Rule. The new information is intended to clarify the OFCCP recordkeeping requirements of federal contractors and subcontractors.  The rule originally went into effect in 2006.

The Internet Applicant Recordkeeping Rule defines an “internet applicant” as an individual who:

  • Submits an expression of interest in employment;
  • Meets the basic qualifications for the job;
  • Is considered for employment; and
  • Does not withdraw from consideration.

The clarifications make it clear that employers are required to maintain all records regarding their hiring processes.  In addition, they are also required to maintain records regarding the race, gender and ethnicity of all job applicants – even when third party recruiting and vetting companies are used such as online job boards and search firms.  The FAQs clarify that while a third party company may maintain the data on the contractor’s behalf, the contractor, not the third party company, will be held accountable if the specified records are not maintained.

The new FAQs address other issues such as job fairs, job boards, campus recruiting, niche and diversity databases, and job descriptions.  Conveniently, OFCCP marked the twelve new questions with “NEW” to make them easily identifiable.

Visit OFCCP’s webpage for a complete listing of all FAQs regarding the Internet Applicant Rule.


Union Contractors Committee Begins Quarterly Conference Calls

AGC of America’s Union Contractors Committee (UCC) has begun holding quarterly conference calls.  The first call took place on July 10.  Approximately 50 AGC members and chapter staff registered.  The call included remarks by Chairman Bill Wilson, an update on labor relations matters by committee staff associate Denise Gold, an update on multiemployer pension reform activities by staff associate Jim Young and chapter executive Jack Ramage, and a roundtable discussion of collective bargaining issues, jurisdictional disputes and other union contractor concerns.

AGC of America’s Union Contractors Committee (UCC) has begun holding quarterly conference calls.  The first call took place on July 10.  Approximately 50 AGC members and chapter staff registered.  The call included remarks by Chairman Bill Wilson, an update on labor relations matters by committee staff associate Denise Gold, an update on multiemployer pension reform activities by staff associate Jim Young and chapter executive Jack Ramage, and a roundtable discussion of collective bargaining issues, jurisdictional disputes and other union contractor concerns.

The second conference call is scheduled for Tuesday, Oct. 11, at 3:00 p.m. EST.  All AGC-member union contractors and collective bargaining chapter staff are invited to participate.  Click here to register for the call.  Call-in information will be sent 1-2 weekdays prior to the call to those who register using the link.

The primary purpose of the calls is to provide an opportunity for an exchange of information about current activities around the country of relevance to union contractors outside of the UCC’s annual meeting at the Annual Convention.  The UCC will meet at AGC’s 2013 Annual Convention in Palm Springs, Calif., on March 6 at 1:45 p.m.  Laborers General President Terry O’Sullivan is scheduled to speak.


Union Contractor Ordered to Make Benefit Fund Contributions for Nonbargaining Unit Work

The U.S. Court of Appeals for the Seventh Circuit (Ill., Ind., Wis.) has held that a contractor was required to make contributions to Taft-Hartley pension and health-and-welfare plans for all hours worked by a bargaining-unit employee, including non-bargaining unit work.

The U.S. Court of Appeals for the Seventh Circuit (Ill., Ind., Wis.) has held that a contractor was required to make contributions to Taft-Hartley pension and health-and-welfare plans for all hours worked by a bargaining-unit employee, including non-bargaining unit work.

The contractor, DLF Construction, entered into a Memorandum of Joint Working Agreement (“MOA”) with Local 692 of the Cement Masons union in 2006.  Under the MOA, DLF agreed to be bound to all area-wide CBAs between the union and employer associations.  The CBAs required employers to make contributions to the pension and health-and-welfare plans.

Between 2006 and 2008, Panifilio Mata, a member of Local 692, performed cement-related work for DLF as well as other kinds of work, such as painting and installing hardwood floors.  DLF made contributions on Mata’s behalf to the benefit funds designated in Local 692’s CBAs for hours Mata spent performing the cement-related (bargaining unit) work but not for hours he spent performing other (nonbargaining unit) work.  After conducting an audit, the funds sued DLF to collect about $12,000 in contributions for the hours Mata worked on nonbargaining unit work.

DLF argued that it owed contributions only for bargaining unit work.  It rested its claim on a paragraph in the MOA stating that the contractor agrees to be bound to the CBAs “for all aforesaid Cement Masons, Plasterer and Shop Hand employees doing bargaining work as described in the agreement” (emphasis added).

The court rejected DLF’s interpretation of that language.  In addition to binding DLF to the CBAs, which the parties did not dispute, that language “establishes the type of employee covered under the CBA — i.e., an employee that does bargaining unit work,” said the court.  “All this paragraph does is establish that, for an employee to be covered under the CBA, he or she must be an employee who does bargaining unit work; it does not limit the CBA’s coverage to employees doing only bargaining unit work.”

The court found that the language in the CBAs requiring DLF to make contributions to the funds for “each hour worked by employees covered by [the CBAs]” was straightforward and plain.  “And employees covered by the CBAs are employees who are bargaining unit members — i.e., employees who perform work within the trade jurisdiction of the Cement Masons Union,” which is set forth in another section of the CBA.  According to the court, the section setting forth the union’s trade jurisdiction merely describes the union’s trade activities for purposes of jurisdictional disputes.  It was not intended to, and does not, define bargaining unit work for purposes of fringe benefit contributions.

Finding no language in either the MOA or the CBAs that limits DLF’s obligations to make benefit fund contributions, and finding that the CBAs are clear that DLF must make contributions for each hour worked by a covered employee, the court granted judgment in favor of the funds.

In light of this holding and as always, union contractors are advised to assign nonbargaining work to bargaining unit employees with caution, taking note of applicable language in labor agreements.  AGC collective bargaining chapters are likewise advised to review their agreements for language similar to that in the present case and to consider the prudence of seeking modification of such language in future collective bargaining negotiations.

McCleskey v. DLF Construction, Inc., Case No. 11-1826 (7th Cir., 7/23/12).


Newly Released Construction Multiemployer Pension Plan Inventory Supports AGC Lobbying Efforts

Volatile financial markets and changing worker demographics have lead to funding shortfalls in construction-industry multiemployer pension plans that cannot easily be corrected by only increasing contribution rates, explains a report recently released by the Mechanical Contractors Association of America (MCAA) and Horizon Actuarial Services.  The Inventory of Construction Industry Pension Plans, 2012 Edition contains an inventory of historical data for all multiemployer pension plans in the construction industry (not just mechanical trades).  It summarizes and analyzes key trends in plan demographics, cash flows, investments, funding, and expenses from 2001 through 2010 based on Form 5500 filings. 

Volatile financial markets and changing worker demographics have lead to funding shortfalls in construction-industry multiemployer pension plans that cannot easily be corrected by only increasing contribution rates, explains a report recently released by the Mechanical Contractors Association of America (MCAA) and Horizon Actuarial Services.  The Inventory of Construction Industry Pension Plans, 2012 Edition contains an inventory of historical data for all multiemployer pension plans in the construction industry (not just mechanical trades).  It summarizes and analyzes key trends in plan demographics, cash flows, investments, funding, and expenses from 2001 through 2010 based on Form 5500 filings. 

“By analyzing these trends, we can better understand how these construction industry plans have evolved over the past decade and where they may be headed in the future,” according to the report.  The report offers information that may be useful to contributing employers in compliance with the new disclosure standard issued by the Financial Accounting Standards Board (FASB).  It also provides plan comparative data that may be useful to plan trustees.

The report also supports efforts by AGC, MCAA, and others in the industry working together to educate Congress about the need for legislative reforms in laws governing multiemployer pension plans.  AGC and MCAA are both members of two groups working together to develop solutions to the current crisis and to bring about long-term, systemic change.  One of the groups is a broad, labor-management, cross-industry group of stakeholders led by The National Coordinating Committee of Multiemployer Plans called the Retirement Security Review Commission (RSRC).  The other is specifically for construction employer associations. 

The RSRC is in the latter stages of preparing recommendations to present to Congress.  The recommendations are expected to include suggested technical corrections to the Pension Protection Act of 2006, additional tools for deeply troubled plans, models for flexible retirement plans, and miscellaneous other changes to the law.  The intent is to provide reliable retirement income to workers while reducing financial risks to contributing employers.  AGC will release the recommendations when final and ready. 

Meanwhile, AGC and its allies in the construction employers coalition have already begun meeting with Congressional staff to educate them on the issues and set the stage for legislative action.  Congress is not expected to begin to consider pension reform until 2013.

For more information, please contact Denise Gold at goldd@agc.org.


U.S. Department of Labor Plans Additional Guidance on Apprenticeship Fund Expenses

As the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) continues its focus on auditing apprenticeship and training funds expenses, AGC has learned that in addition to graduation ceremonies and marketing, EBSA is also finding excessive expenses associated with apprenticeship competitions and instructor retirement dinners.

As the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) continues its focus on auditing apprenticeship and training funds expenses, AGC has learned that in addition to graduation ceremonies and marketing, EBSA is also finding excessive expenses associated with apprenticeship competitions and instructor retirement dinners.

According to Phyllis C. Borzi, Assistant Secretary of Labor for EBSA, there is so much confusion over apprenticeship competitions that EBSA expects to issue guidance on allowable expenses later this month. At a public meeting attended by AGC, Borzi said that “modest” expenses associated with travel for apprentices to attend a competition may be deemed allowable, but lavish spending – such as first-class airfare for apprentices and guests, limousine transportation, hotel suites, etc. – would not be allowable.

She said instructor retirement dinners and cash gifts to instructors also are being scrutinized by EBSA auditors, although she did not say whether the upcoming field bulletin would include guidance on those items.

Borzi added that just because a representative from the state or federal Department of Labor (DOL) attends an event – be it a graduation ceremony, retirement dinner or apprenticeship competition – it does not mean that the event is in compliance with the law. She cited the 2011 U.S. DOL event marking the 100th anniversary of state-registered apprenticeships that was held on the National Mall in Washington, D.C., and at which Secretary of Labor Hilda Solis spoke, as an event that some apprenticeship training funds spent large amounts to attend. EBSA does not consider those expenses appropriate for a training fund because there could have been no expectation on the part of most out-of-state apprenticeship programs that the people attending the event would have a direct interest in joining their specific apprenticeship program.

Apprenticeship and training programs that are covered by Employee Retirement Income Security Act (ERISA) – typically those that run a multi-year training program registered with DOL’s Office of Apprenticeship or a recognized State Apprenticeship Agency – are subject to an EBSA audit and should be aware both of EBSA’s stepped-up auditing of such programs and which expenses cannot be funded by the training funds.

While conducting audits, EBSA is finding instances of fund administrators who are unaware they are covered by ERISA, and advises all apprenticeship and training fund administrators to check the ERISA website, which offers tools and compliance information. EBSA currently has 200 open investigations nationwide, Borzi said.

EBSA hosted a webinar on apprenticeship plans and fiduciary responsibilities on July 26, 2012, which is archived online.

For further information apprenticeship and training fund expenses, please see Field Assistance Bulletin No. 2012-01, issued by EBSA on April 2, 2012.


Program for Young Unauthorized Immigrants Begins; Employers Beware

On Aug. 15, 2012, the U.S. Department of Homeland Security (DHS) announced that it will begin accepting applications for Deferred Action for Childhood Arrivals (DACA).  The DACA program allows certain undocumented immigrants who came into the U.S. before age sixteen to gain temporary relief from deportation and obtain work authorization.  While DHS has confirmed that applicants for the program will not face adverse action for coming forward, officials have not provided the same assurances for employers who may be asked to provide documentation for existing workers.  The program is expected to benefit as many as 1.76 million unauthorized immigrants, of which 58% are currently working.

On Aug. 15, 2012, the U.S. Department of Homeland Security (DHS) announced that it will begin accepting applications for Deferred Action for Childhood Arrivals (DACA).  The DACA program allows certain undocumented immigrants who came into the U.S. before age sixteen to gain temporary relief from deportation and obtain work authorization.  While DHS has confirmed that applicants for the program will not face adverse action for coming forward, officials have not provided the same assurances for employers who may be asked to provide documentation for existing workers.  The program is expected to benefit as many as 1.76 million unauthorized immigrants, of which 58% are currently working.

Individuals may be eligible to participate in the DACA program if they:

  • Came to the U.S. under the age of sixteen;
  • Were under age 31 and had no valid immigration status on June 15, 2012;
  • Have continuously resided in the U.S. between June 15, 2007 and the present;
  • Are enrolled in school on the date of the request, graduated from high school, obtained a GED, or were honorably discharged from the U.S. Armed Forces;
  • Have not been convicted on a felony, a “significant” misdemeanor, or three or more other misdemeanors, and do not otherwise pose a threat to national security or public safety.

The program obviously presents a positive opportunity for certain individuals who are presently unauthorized to work in the U.S. and to employers seeking to legally hire new workers.  But it also presents potential problems for both individuals and employers.  First, the future of the program – which is not codified by legislation – is uncertain.  Mitt Romney has indicated that he would rescind the program if he is elected president.  Some members of Congress have also threatened action to challenge the program.  If the program is rescinded or invalidated, what would become of the information provided by DACA applicants or of “Employment Authorization Documents” (EADs) obtained by successful applicants is unclear.

Moreover, the program as it stands raises concerns for employers currently employing individuals who apply for an EAD through DACA.  DHS is expected to encourage applicants to provide certain types of documentation, including information that may be obtained from the worker’s current employer.  But, if an employee tells his employer that he is applying for the program, he is effectively telling his employer that he is not currently authorized to work in the U.S., was not legally employable on the date of hire, and may have provided fake documents for the purposes of completing the I-9 form.  Even if the employee doesn’t inform his employer about his application to DACA during the application process but comes forward with an EAD or new Social Security Number later, the validity of the I-9 is called into question.

This could create problems in a government I-9 audit.  It could potentially also lead to employer liability for knowingly employing someone who was not – prior to obtaining an EAD or, if the DACA program is terminated, perhaps even after obtaining an EAD – authorized to work.  It could also mean that the employee violated company “honesty” policies at the time of hire.

An employer that obtains knowledge or constructive knowledge that an employee is unauthorized is required under current law to terminate the employee.  And an employer with an “honesty” policy is generally legally entitled to terminate an employee for violating that policy, so long as the policy is consistently enforced.  However, terminating an employee under the above-described circumstances could bring about charges of unlawful discrimination.

As a result, employers are advised to proceed with caution when situations such as these arise.  With a termination, employers should maintain all documentation relating to the termination, including a copy of any policy violated.  When retaining an employee who is believed to have previously presented false documentation, the employer should keep both the old and the new paperwork in the employee’s file.  A note explaining the circumstances and the basis for believing that the worker was authorized at the time of hire should also be included in the file and should remain strictly confidential.  Employers facing these situations are best advised to consult an employment immigration attorney licensed in the state before taking any action.

The U.S. Citizenship and Immigration Services of DHS has posted frequently asked questions about DACA on its website.  For additional information on immigration compliance for employers, visit AGC’s Labor & HR Topical Resources webpage.  The primary category is “Other Legal Issues” and the secondary category is “Immigration and Employment Eligibility.”


Asking Employees Not to Discuss Internal Investigations May Violate Workers’ Rights, NLRB Rules

The National Labor Relations Board has held that a company policy – asking employees who lodge an internal complaint not to discuss the matter with co-workers while the matter is investigated – violates the National Labor Relations Act (NLRA).

The National Labor Relations Board has held that a company policy – asking employees who lodge an internal complaint not to discuss the matter with co-workers while the matter is investigated – violates the National Labor Relations Act (NLRA).

The case arose after James Nvarro, a sterile technician employee of Banner Estrella Medical Center (Banner) complained that his manager had instructed him to sterilize hospital instruments in a manner that Nvarro believed to be undocumented and that made him uncomfortable.  When meeting with Nvarro, Banner’s human resources consultant requested that Nvarro not discuss the matter with co-workers while the investigation was ongoing.  The consultant made the request in accordance with the company’s internal, written procedures for handling employee interviews.

The administrative law judge found that the request was a permissible “suggestion…for the purpose of protecting the integrity of the investigation”  so that employees give their own versions of the facts rather than what they may have heard from someone else.  The judge found that Banner had a legitimate business reason for making the suggestion and that it did not violate the NLRA.

The Board disagreed and overturned the judge’s decision on this issue.  The Board found that Banner’s business interest – a “generalized concern with protecting the integrity of its investigations” – was insufficient to outweigh employees’ rights under Section 7 of the NLRA.  Section 7 protects the rights of employees (both union and nonunion) to engage in “concerted activities.”  This includes the right to discuss wages, hours, and terms and conditions of employment.  In order to minimize the impact on Section 7 rights, the Board said, the employer must make a case-by-case determination as to whether any witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover-up.  Banner’s blanket approach failed to meet those requirements.

In light of the Board’s decision, AGC members should review company policies and procedures for potentially overbroad language concerning confidentiality.  Any per se rules prohibiting employees from discussing internal investigations of employee complaints or misconduct (or from discussing wages, hours, or other terms and conditions of employment) should be revised.  Tailor any potentially overbroad language, consulting with outside counsel as needed.  Also, be sure to train all staff who conduct investigations on this issue.

Banner Health System, 358 NLRB No. 93 (7/30/12).


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