2013: W-2s Must Now Include Value of Employer-Sponsored Benefit Plans

By: Matthew Fox

January 2013 marked the beginning of new challenges for employers that issue more than 250 W-2s.[1]  Under the Patient Protection and Affordable Care Act (the “Act”), these employers will be required to report to employees the total cost of their coverage under an employer-sponsored group health insurance plan.[2]  Employees often forego cash compensation in favor for employer benefits, including health insurance plans.  Beginning this year, employees will know just how much their health insurance benefit costs.  Although health benefits are still tax free,[3] labor unions and employer groups think these benefits could easily be taxed in the future now that this value must be reported to the government.[4]

Box 12, Code DD on this year’s W-2 will show the cost of both employee and employer health care costs.[5]   This number is supposed to reflect both the cost paid by the employer as well as the part that is paid by the employee.[6]  The IRS states “[t]his reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.”[7]  Often, employees have no idea how much their employer pays for health insurance.  Employees think this benefit is free, and are unaware of its high costs to the employer.  The Kaiser Family Foundation’s 2012 annual survey illustrated just how costly health insurance benefits are to the employer.[8]  Premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage.[9]  These costs have increased 25 percent and 30 percent respectively over the last five years.[10]  The tax-free treatment of employer-sponsored group health insurance plans is the largest in the tax code.[11]  The government foregoes approximately $180 billion per year by providing this tax subsidy.[12]

Peter R. Orszag, director of the Congressional Budget Office when the Act was passed, told lawmakers, “[t]he economic evidence is overwhelming, the theory is overwhelming, that when your firm pays for your health insurance, you actually pay through reduced take-home pay. The firm is not giving that to you for free.”[13]

If an employer fails to comply with the new W-2 reporting requirements, they may be subject to penalties of $200 per W-2 form, up to a maximum of $3 million.[14]

One potential problem with disclosure is the requirement only illustrates the cost of health insurance to the employer, not the value.[15]  This may penalize an employer that has negotiated low premiums for a high value plan.  An employee may look to work for an employer that has the highest health insurance costs, believing it will translate to a higher value plan, with better coverage.  As incentives drive the economy and the world, the unintended effect of this new requirement may lead to wasteful spending on healthcare plans.  Employers may begin to feel the need to spend copiously on health care insurance in order to attract the best talent.[16]

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[1] W-2 Reporting, UnitedHealthcare, http://www.uhc.com/united_for_reform_resource_center/health_reform_provisions/w_2_reporting.htm (last visited Feb. 21, 2013).

[2] Form W-2 Reporting of Employer-Sponsored Health Coverage, IRS (Aug. 4, 2012), http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage.

[3] Id.

[4] Robert Pear, To Open Eyes, W-2s List Cost of Providing a Health Plan, N.Y. Times, Jan. 30, 2013, at A12.

[5] Form W-2 Reporting of Employer-Sponsored Health Coverage, supra note 2.

[6] Pear, supra note 4.

[7] Form W-2 Reporting of Employer-Sponsored Health Coverage, supra note 2.

[8] The Kaiser Family Foundation, Employer Health Benefits: 2012 Annual Survey, 2012, at 1.

[9] Id.

[10] Id.

[11] Pear, supra note 4.

[12] Id.

[13] Id.

[14] Id.

[15] Katie Booth, The Salience of Numbers: W-2s Now List Cost of Employer-Sponsored Health Insurance, Harvard L. Blog (Feb. 1, 2013), https://blogs.law.harvard.edu/billofhealth/2013/02/01/the-salience-of-numbers-w-2s-now-list-cost-of-employer-sponsored-health-insurance/#more-4352.

[16] Id.

Why Do We Work for Free?

By: Joseph Gaon

On Friday February 15, 2013, A former unpaid intern at Elite Model Management Corp. slapped the agency with a proposed $50 million class action, claiming Elite violates wage laws by requiring its interns to do the work of employees for no pay. [1] In a her Federal complaint former intern Dajia Davenport alleges that the self-proclaimed “world’s most prestigious modeling agency” runs afoul of federal and state wage statutes by intentionally misclassifying employees as interns to get out of paying them wages and overtime.[2] This type of practice is common in the fashion industry. Last March the integrated-media giant Condé Nast set out to reform their internship policies in order to confront the controversies of not paying their interns.[3] One intern at Condé Nast was looking forward to writing for the company and when asked what her experience was like she exclaimed, “I really wasn’t given a chance to do anything except make copies and do deliveries.”[4] The same intern said that she was working 30 hours a week, getting paid nothing except a $550 stipend to cover a travel expense, and the job opened minimal doors for her upon graduation.[5]

This type of work is not only common in the fashion industry, but is also common in the legal work place as well. From my experience alone the number of law students who are willing to work for free just to put something on the resume is staggering. Why do we do this to ourselves? We are seeking “real world” job experience that will boost are resumes, but are these practice fair or legal?

The FLSA definition of an employee is a person “employed by an employer” and defines “employ” as “to suffer or permit to work.”[6] In Walling v. Portland Terminal Co. , [7]the Supreme Court held that an individual who “without promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit” is not an employee for purposes of the FLSA. This undercuts many provisions that are present in the FLSA even though the Supreme Court believed that the training was a necessary prerequisite for employment in the field.[8]

In April 2010, the Labor Department issued a “Fact Sheet” reiterating  “six factors” that had long been included in the Wage and Hour Division‘s Field Operations and set forth guidelines for unpaid internships.[9] The six factors include 1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment; 2. The internship experience is for the benefit of the intern; 3. The intern does not displace regular employees, but works under close supervision of existing staff; 4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded; 5. The intern is not necessarily entitled to a job at the conclusion of the internship; and 6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. [10]

The guidelines basically lie out that if an intern is working for free they cannot displace other employees and do their jobs, and are working a long side other employees helping them with their substantive work, and it was these “six factors” that differentiate between an intern and a trainee who does not have to be paid.[11] In order to satisfy the concerns of the Labor Department managers should be reminded that unpaid interns will be joining their department but they are their to learn about the work environment and what the job entails, and they are not their to supplement the workforce.[12] Over the last couple years that has been an increase in the amount of litigation surrounding unpaid interns, with case being filed in federal and state courts in New York that allege violations of federal and state wage laws.[13] With the increase in litigation over these issues, and the increase controversy over them, then why does it appear that the unpaid internship is not disappearing, and is actually becoming more prevalent because of the current state of the legal market?

Over the last two years it appears to me that most of the jobs posted on job sites are for unpaid internships because legal employers know that today’s job market is incredibly competitive, and that most law student will do anything in order to get a leg on their competition and become a viable candidate for postgraduate work. Most students seem to be happy to do unpaid work because that is all they can get, they and need the experience or they will not get jobs upon graduation. It seems like as law a student we are all too happy to do work that does not fall within the FLSA and its six guidelines. We are not trainees, but doing work that is either being billed for, or substantive work that we should be compensated for because it falls outside the “six factor” test. The question becomes how do we as law students band together and demand payment that we so

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[1] Abigail Rubenstein, Unpaid Intern Hits Modeling Agency With $50M Wage Suit (Feb. 20, 2013 11:41 AM), http://www.law360.com/employment/articles/416466/unpaid-intern-hits-modeling-agency-with-50m-wage-suit-

[2] Id.

[3] Maegan Vazquez, Internship Confessions: Despite Recent Labor Reform, Condé Nast Still Breaks the Rules, (Feb. 20, 2013 11:41 AM), http://nyulocal.com/on-campus/2013/02/01/internship-confessions-despite-recent-labor-reform-conde-nast-still-breaks-the-rules/#ixzz2LSV31VUo

[4] Id.

[5] Id.

[6] Samuel Estreicher and Allan S. Bloom, Unpaid Internships Under Legal Scrutiny, New York Law Journal, (Jan. 4, 2013, available at http://www.newyorklawjournal.com/PubArticleNY.jsp?id=1202583208824&Unpaid_Internships_Under_Legal_Scrutiny&slreturn=20130123115420)

[7] 330 U.S. 148 (1947)

[8] Id.

[9] Id.

[10] See  U.S. Department of Labor, Wage and Hour Division, “Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act” (April 2010), http://www.dol.gov/whd/regs/compliance/whdfs71.pdf.

[11] Id. at 2

[12] Id. at 3

[13] Id. at 2

NLRB Rules The New York City Bus Drivers Strike Lawful

By: Laura Ahern

A while ago, fellow Journal member Lauren Murphy wrote about the start of the New York City bus strike in which more than 8,000 New York City school bus drivers and aides went out on strike in a dispute involving job security guarantees in city contracts.[1]  The strike, which began on January 16, 2013 involves drivers and special education escorts from Local 1181 of the Amalgamated Transit Union and the bus companies who contract with the city.[2]  The strike has marked the driver’s first strike in more than three decades.[3]

While the strike is still ongoing, this week the NLRB Office of General Counsel has responded to a charge filed with the NLRB Brooklyn office by a group of bus companies alleging that the strike is unlawful under Section 8(b)(4) of the National Labor Relations Act.[4]  Section 8(b)(4) of the NLRA prohibits unions from striking secondary employers in order to pressure the primary employer.[5]

Sec. 8. (b) [Unfair labor practices by labor organization] It shall be an unfair labor practice for a labor organization or its agents-

(4)(i) to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services; or (ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is.

The bus companies argued that the union’s primary dispute was with the New York Dept. of Education, and not the bus companies themselves.[6]  But, the bus drivers and aides are not directly hired by the city; they are hired for the companies which then contract with the city.[7]

The dispute stems from the decision by Mayor Michael Bloomberg to put the bus contracts up for bid for the first time since 1979 in an effort to cut costs.[8]  In their bidding process, the bus companies, not the city, set the salaries and benefits for the drivers and the goal in putting the bus routes out for competitive bidding was to save tax money for the city. The union seeks job protections (EPPs) for current drivers in the new contracts, but the city cites the New York State Court of Appeals decision as barring it from including such provisions because of competitive bidding laws, which the union argues is not the case.[9]

The General Counsel has found that the strike does not violate the NLRA because the union has a primary labor dispute with the bus companies.[10]  The Advice Memorandum, issued February 1, 2013, found that the bus companies, which maintained collective bargaining agreements with the union for many years before they expired in December, are primary employers in the labor dispute, along with the Department of Education.[11]

In the instant case, it is clear that the Union has a primary labor dispute with the Charging Party Employers as to whether the EPPs will be included in the parties’ collective bargaining agreements, as the Union has proposed. This primary dispute directly involved the job security and other terms and conditions of employment of the employees of the Charging Party Employers. Significantly, while the Charging Party Employers have not agreed to the Union’s proposal that the collective-bargaining agreements incorporate the EPPs, the Charging Employers do not deny that they have the ability to do so. Indeed, the parties themselves have made clear the primary nature of the dispute by their acknowledgment in their past collective-bargaining agreements that the job security provided by the EPPs is “an integral part” of the agreements, as well as by the express provisions permitting the Union to reopen the agreements and to strike the Charging Party Employers in the event DOE promulgates any contract bid without the EPPs. Given this primary labor dispute with the Charging Party Employers, we conclude that the Union has not violated Section 8(b)(4) by its strike.

Accordingly, the Regional Office will dismiss the charge alleging an illegal secondary strike.[12]

While the ruling is good news for the striking bus drivers, it allows the strike to continue while no resolution appears to be in sight.

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[1] NYC School Bus Drivers Strike Over Job Security, USA Today (Jan. 16, 2013, 1:04 PM), http://www.usatoday.com/story/news/nation/2013/01/16/nyc-school-bus-drivers-strike/1839011/.

[2] Id.

[3] Id.

[4] Memorandum from Barry J. Kearney, Division of Advice, Office of the General Counsel to James G. Paulsen, Regional Director, Region 29 (Feb. 1, 2013) available at http://mynlrb.nlrb.gov/link/document.aspx/09031d4580f79112

[5] National Labor Relations Act, 29 U.S.C. § 158(b)(4) (1935).

[6] Memorandum, supra note 4.

[7] NYC School Bus Drivers Strike Over Job Security, supra note 1.

[8] Eileen AJ Connelly & Verena Dobnik, School bus drivers go on strike in New York City, Wall Street Journal (Jan. 16, 2013, 2:37 AM), http://online.wsj.com/article/AP68c2aaaeff244a3f90c30136fdd59491.html?mod=WSJ_ article_outbrain&obref=obinsite

[9] See L&M Bus Corp. v. New York City Dept. Education, 2008 NY Slip Op 31246 (Apr. 22, 2008).

[10] Memorandum, supra note 4.

[11] Id.

[12] Id.

New NY Law Proposes to Ban Discrimination Based on Unemployment Status

By: Jamie Haar

Since 2008, Americans around the country are still facing the worst job market since the Great Depression. A problem that has emerged during the recession is employers’ practice of discriminating based on an applicant’s unemployment status.[1] The grim job prospects experienced by many throughout the country led Congressman Hank Johnson to introduce the Fair Employment Act in March of 2011, which sought to amend Title VII of the Civil Rights Act of 1964 “to prohibit discrimination on the basis of unemployment status.”[2] No action has been taken on the Act except that it was referred to the House Committee on Education and the Workforce and the Subcommittee on Health, Employment, Labor, and Pensions.[3]

Even if the Act were to remain stagnant, arguments have been made that discriminating based on unemployment status has a disparate impact on workers protected under other federal antidiscrimination law such as the Age Discrimination in Employment Act of 1967 as well as classes of people already protected under Title VII such as classifications based on race, sex, and national origin.[4] According to Christine L. Owens, the Executive Director of the National Employment Law Project, the overall unemployment rate was 9% in January 2011.[5] Of the 9%, the unemployment rate for African Americans was 15.7% compared to white workers which was 8%.[6] Based on these percentages, discriminating based on unemployment status affects Africans Americans twice as much as it does white workers.[7]

 Additionally, the blanket exclusion of the unemployed also has a disparate impact on older workers.[8] According to a 2010 survey, 43.9% of workers over 65 were unemployed for more than a year, the highest unemployment percentage amongst the other age groups.[9] Because older workers are more prone to long term unemployment, they are more likely to be adversely affected by discrimination based on unemployment status.[10]

Given that disparate claims are hard to prove under federal antidiscrimination laws[11], states have taken the initiative to include unemployment status as a protected class under state antidiscrimination law. In May 2011, responding to a 9.4% unemployment rate, New York Democrats introduced a bill that would make it unlawful to discriminate based on unemployment status.[12] In January 2013, the New York City Council passed the bill which states that “[i]t shall be an unlawful discriminatory practice for an employer or licensing agency, because of an individual’s unemployment status, to refuse to hire or to employ or to bar such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment.”[13] It will also be unlawful for an employer to circulate an advertisement that expressly states that a potential applicant must be employed in order to apply.[14] The bill would still allow employers to consider employment status if there was a “substantially job-related reason” to do so.[15] Mayor Bloomberg states that he plans on vetoing the bill because he claims the new restriction would hurt small businesses in that it would cause an increase in lawsuits.[16] He also stated that he “can’t think of any rational employer who wouldn’t want to know what you’ve been doing for a period of time.”[17] However, the 44 to 4 vote will likely override his veto.[18]

            Will this new legislation lower the unemployment rate in New York? Time will tell.

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[1]B. 2825, 236^th Gen. Assemb., Reg. Sess. (N.Y. 2013), http://assembly.state.ny.us/leg/?default_fld=&bn=A02825&term=2013&Summary=Y&Actions=Y&Votes=Y&Memo=Y&Text=Y

[2] Fair Employment Act of 2011, H.R. 1113, 112th Cong. (1st Sess. 2011).

[3]Id.

[4] Written Testimony of Christine L. Owens Executive Director National Employment Law Project, U.S. Equal Opportunity Commission (Feb. 11, 2011), http://www.eeoc.gov/eeoc/meetings/2-16-11/owens.cfm

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] See Griggs v. Duke Power Co., 401 U.S. 424 (1971) (holding that requiring a high school education or passing of standardized general intelligence test as a condition of employment has a disparate impact on African American employees).

[12]New York Bill Would Ban Unemployment Discrimination, Thomson Reuters (May 19, 2011) http://newsandinsight.thomsonreuters.com/New_York/News/2011/05_May/New_York_bill_would_ban_unemployment_discrimination.

[13] B. 2825, 236^th Gen. Assemb., Reg. Sess. (N.Y. 2013).

[14] Id.

[15] Arthur Delaney, Unemployment Discrimination Banned by New York Council Bill, Huffington Post (Jan. 23, 2013, 5:57 PM) http://www.huffingtonpost.com/2013/01/23/unemployment-discrimination_n_2536844.html

[16] Dana Rubinstein, Bloomberg Calls Quinn’s unemployment-discrimination effort ‘misguided’, Capitol (Jan. 23, 2013, 1:24 PM) http://www.capitalnewyork.com/article/politics/2013/01/7302132/bloomberg-calls-quinns-unemployment-discrimination-effort-misguided

[17] Id.

[18] Delaney, supra note 15, at 1.

O’Neill v. Sch. Comm. of N. Brookfield, 464 Mass. 374 (2013)

Facts: O’Neill (Plaintiff), while superintendent of schools in North Brookfield, entered into an employment contract with the School Committee (Defendant) which provided that Plaintiff would be annually reimbursed for a percentage of his health insurance premiums after his retirement. When Plaintiff retired, he continued to use the town’s health insurance plan through the Consolidated Omnibus Budget Reconciliation Act (COBRA). When the COBRA coverage expired, Plaintiff requested reimbursement from Defendant pursuant to the employment contract. Defendant denied Plaintiff’s request, stating that “since you are no longer an employee, the [t]own is under no obligation to continue to honor any terms of your prior contract upon your retirement.” Plaintiff filed an action for breach of contract, and specific performance. The Superior Court granted Plaintiff summary judgment and awarded him $46,052.57. Defendant appealed.

Issue: “[W]hether an employment contract between a school committee and a superintendent that contains a provision for annual reimbursement of health insurance premiums in the indefinite future is invalid and unenforceable because it exceeds the six-year limit on such contracts imposed by G.L. c. 71, § 41.”[1]

Defendant’s Argument: A continuing requirement to perform under a contract is evidence of an active, ongoing contract. As such, the obligation to reimburse Plaintiff for a percentage of his health insurance costs annually for life indicates that Plaintiff’s final employment contract was a lifetime agreement, and, therefore, exceeded the allowable six-year duration.

Plaintiff’s Argument: Annual reimbursement of a percentage of health insurance costs is just a benefit provided for in Plaintiff’s final employment contract. The fact that this benefit was to be paid annually after the contract expired does not necessarily mean that the contract extended beyond its stated term of three years.

Holding: Plaintiff wins.  The court disagrees with the defendant’s position that the reimbursement clause converts Plaintiff’s contract into a lifetime agreement that exceeds six years. The reimbursement clause entitles Plaintiff to reimbursement for a percentage of his health insurance costs going forward, but all the other provisions of the contract, such as those describing his duties and responsibilities as superintendent, ended when Plaintiff retired. As such, the rule that employment contracts between school committees and superintendents may not exceed six years does not absolve the defendants of their contractual obligation in this case.

Briefed By: John Gionis

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[1] G.L. c. 71, § 41 provides that “[a] school committee may award a contract to a superintendent of schools or a school business administrator for periods not exceeding six years which may provide for the salary, fringe benefits, and other conditions of employment, including but not limited to, severance pay, relocation expenses, reimbursement for expenses incurred in the performance of duties or office, liability insurance, and leave for said superintendent or school business administrator” (emphasis added).

Cent. States Se. & Sw. Areas Pension Fund v. Messina Products, LLC, 2013 WL 466196 (7th Cir. Feb. 8, 2013)

Facts: Central States, Southeast and Southwest Areas Pension Fund (Plaintiff), a multiemployer pension plan as defined under ERISA, sued Messina Trucking (“Corporation”), a closely held corporation owned by Stephen and Florence Messina (Defendants). For several years, the Corporation was required to contribute to the Fund for its employees’ retirement benefits under a collective bargaining agreement. In 2007, however, the Corporation completely withdrew from the Fund, and, therefore, incurred roughly $3.1 million in potential liability. Plaintiff, under ERISA, sued the corporation, its owners, and several other companies also owned by the Defendants, claiming that they were all jointly and severally liable for the withdrawal liability as “trades or businesses” under “common control” with the Corporation. The district court held the Defendants, who owned and leased the property from which the Corporation operated, were not engaged in a “trade or business” under ERISA or the Multiemployer Pension Plan Amendments Act of 1980  (“MPPAA”).

Issue: Because Defendants conceded that they were under common control with the Corporation, the only issue is whether Defendants were involved in “trade or business” under ERISA or the MPPAA.

Holding: Exercising de novo review, the court found that Defendants were involved in trade or business.

Reasoning: To define the term “trade or business,” the court looked to a test adopted by the Supreme Court for tax purposes known as the “Groetzinger test.” This Test requires that, in order to be considered the operation of trade or business, economic activity must be performed (1) for the primary purpose of income or profit; and (2) with continuity and regularity. In Central States, Southeast and Southwest Areas Pension Fund v. SCOFBP LLC, 668 F.3d 873 (7th Cir. 2011), this court held that renting property to a withdrawing employer is categorically a trade or business. Here, Defendants rented their property to the Corporation, which they owned. While the general rule is that there is no liability for a withdrawing employer that engages in purely passive investments like real estate, where, like here, the real estate in question is rented to or used by the withdrawing employer, and there is common ownership, the activity is unlikely to be considered truly passive. Moreover, Defendants’ activity is sufficient to satisfy the Groetzinger test because, first, Defendants’ real estate rental activity was for the primary purpose of income or profit and, second, the Corporations’ employees were agents of the Defendants, and their continuous and regular economic activities are imputed to Defendants. Therefore, the Defendants rental activity is considered “trade or business.”

Briefed By: John Gionis

Recent NLRB Decisions, Benefiting Employees, May Be in Jeopardy

By: Meredith Kurz

Decisions made by the top labor law board in the last thirteen may be overturned on the basis that the Board lacked a quorum in making their decisions.[1] President Obama appointed the Board members during breaks during Congressional sessions as opposed to during intersession recesses.[2]  The D.C. Circuit held that these appointments are constitutionally invalid because these appointments may only be made during the breaks between the sessions of Congress (only once per year) and that these appointments may only be made when the spots become vacant during the intersession.[3]

After the departure of Republican member Terence Flynn, the Board was left with only two Democratic members, arguably resulting in more pro-labor decisions.[4] Republican senator John Barasso of Wyoming is pushing for a bill that would not allow the Board to make binding decisions without a quorum.[5] He stated, “Until we have a final resolution from the courts, the NLRB should not be able to issue or enforce decisions that will create even more confusion and illegitimate regulations…My bill will restore clarity, order and respect for the U.S. Constitution.”[6] The Wall Street Journal reported on February 1 that the U.S. Chamber of Commerce, a pro-business coalition, is urging companies to appeal rulings against them on this basis.[7] Thus far, a decision against the soda bottler and distributor Noel Canning was invalidated because the Board lacks a quorum.[8] The Court found that in interpreting the word “recess:” “Not only logic and language, but also constitutional history supports the interpretation advanced by Noel Canning, not that of the Board. When the Federalist Papers spoke of recess appointments, they referred to those commissions as expiring “at the end of the ensuing session.”[9] The court wrote in his decision: “In short, we hold that “the Recess” is limited to intersession recesses. The Board conceded at oral argument that the appointments at issue were not made during the intersession recess: the President made his three appointments to the Board on January 4, 2012, after Congress began a new session on January 3 and while that new session continued. 158 Cong. Rec. S 1 (daily ed.Jan. 3, 2012). Considering the text, history, and structure of the Constitution, these appointments were invalid from their inception. Because the Board lacked a quorum of three members when it issued its decision in this case on February 8, 2012, its decision must be vacated.”[10]

The law firm Jones Day, which represents Noel Canning and the U.S. Chamber of Commerce, has advised its clients that they may appeal any decision made since January 4, 2012 on this ground. Decisions which may be affected by the D.C. Circuit’s finding include that of the Hispanics United of Buffalo case, which held that discussions on Facebook constitute protected, concerted activity under Section 7 of the National Labor Relations Act.[11]

---

[1] Melanie Trottman, Chamber Urges Businesses to Appeal Labor Board Rulings, The Wall St. J. , Feb. 1, 2013, at A3 [hereinafter Chamber Urges Appeals].

[2] D.C. Circuit holds that President Obama’s “recess” appointments to the National Labor Relations Board are constitutionally invalid, Jones Day (Jan. 2013), http://www.jonesday.com/experiencepractices/ExperienceDetail.aspx?experienceid=28297

[3] Noel Canning, A Div. of The Noel Corp., N.L.R.B., No. 12-1115, 2012 WL 276024 (D.C. Cir., January 25, 2013).

[4] Chamber Urges Appeals, supra note 1; Current members are Richard Griffin and Sharon Block. The Board, The Nat’l Lab. Rel. Board, http://www.nlrb.gov/who-we-are/board (last visited Feb. 10, 2013).

[5] GOP Senator proposes bill that would freeze NLRB rules, decisions, Fox News (Jan. 31, 2013), http://www.foxnews.com/politics/2013/01/31/gop-senator-proposes-bill-that-would-freeze-nlrb-rules-decisions/#ixzz2Jf6nC62Z.

[6] Id.

[7]  Chamber Urges Appeals, supra note 1.

[8] Id.

[9] Canning, No. 12-1115, at *9

[10] Id. at 16.

[11] Hispanics United of Buffalo, Inc. and Carlos Ortiz, N.L.R.B., Decision and Order Case, 03-CA-027872 (Dec. 14, 2012).

Hofstra Labor & Employment Law Journal’s 30th Anniversary Symposium

UPDATED 2/13/13

Due to the snowstorm last week, the Symposium was unfortunately cancelled. The LEJer will be updated once the symposium is rescheduled.

____________

The Journal’s 30th Anniversary Symposium is almost here!

The LEJer will be blogging and posting summaries of the panels from the beginning to the end of the symposium. There will be five posts in total: one post for each of the four panels & a summary of NLRB’s Chairman Mark Pearce’s keynote speech.

Attorneys & journal alumni should register to join the journal in this fantastic event. CLE credits will also be available! On behalf of the journal, we hope to see you all there!

Sincerely,
Lana Yang
Volume 30′s Technology Editor

___________

On Friday, February 8, the Hofstra Labor & Employment Law Journal will be holding our annual Symposium from 8:30 a.m.-5 p.m. at the Sentry Centers Midtown East Conference Center. This year’s Symposium will address changes in labor and employment law over the last 30 years and will include four 90-minute panel discussions of different substantive labor and employment law areas — employee benefits, traditional labor law, arbitration and mediation in labor and employment law, and employment discrimination. Continuing Legal Education credit will be offered to those in attendance. In addition, we are proud to announce that the event will feature a keynote address from current National Labor Relations Board Chairman Mark Gaston Pearce.

As Dean Eric J. Schmertz eloquently wrote in the foreword to the Hofstra Labor & Employment Journal’s first Volume, our principal purpose has always been “to seek and publish articles of excellence on labor law subjects from distinguished practitioners, management and union representatives, government officials and scholars.” While labor and employment law has changed greatly over the last 30 years, the Journal’s commitment to publishing the highest quality work in the field has never wavered. It is this commitment to excellence that has made, and continues to make, theHofstra Labor & Employment Law Journal one of the preeminent labor and employment law journals in the country.

We will also be holding an Alumni Reception, which will take place Thursday, February 7, from 6:30-9 p.m. at Dechert LLP’s New York office. Tickets for the Reception are $50 for alumni from Volumes 1-20 and $30 for alumni from Volumes 21-29.

The Journal’s quality reflects 30 years of hard work from our former and current editors and staff. At both our Alumni Reception and Symposium we wish to recognize our Journal’s achievements and the contributions of countless students and authors. You can register for these events by visiting law.hofstra.edu/LawEvents. We hope to see you at both events.

Sincerely,

Judith Massis-Sanchez
Editor-in-Chief

Joshua D. Seidman
Symposium Editor

Inderjit Singh Dhami
Alumni Affairs Coordinator

New Jersey and New York Propose Minimum Wage Increases in the Aftermath of the Economic Recession

By: Chris Muniz

In January of 2012, Bill A2161,[1] which proposed to increase the New Jersey minimum wage to $8.50, was introduced and referred to the New Jersey Assembly Labor Committee.[2]  Currently, New Jersey is one of twenty-three states that maintain the federal minimum, $7.25, meaning this Bill would give New Jersey the third highest minimum wage in the Country.[3]  After being reported out of the Assembly Labor Committee, the Bill was passed by the full Assembly on May 24, 2012 with a 46-33-0 vote.[4]  On November 19, 2012, the New Jersey State Senate Budget Committee passed the Bill with a 7-6 vote.[5]

At that time, Governor Chris Christie indicated to some Senate members that he would not sign the Bill because it included an automatic annual wage adjustment provision based on the consumer price index.[6]  Interestingly, some Republicans in the Legislature noted that they were not opposed to a minimum wage increase, but questioned the wisdom of doing so with the increased unemployment rate and in the aftermath of Superstorm Sandy.[7]  In spite of some of these concerns, the Senate passed the Bill with a 23-16 vote on November 11, 2012.[8]  The Bill was ultimately approved by both houses on December 3, 2012, with a 44-31-1 vote and was left for Governor Christie’s signature to sign it into law.[9]

Just this past Monday, January 28, 2013, Governor Christie vetoed the Bill on the last possible day he had to make his decision.[10]  Governor Christie however countered with a scaled back plan to phase in a one dollar increase over the next three years, a 25-cent hourly increase in the first and third years and a 50-cent hourly increase in the second year.[11]  As previously noted, Governor Christie’s stated reasoning for doing so was his fear that the Bill would have hurt the State’s economy.[12]  Specifically, Governor Christie stated that “[T]he sudden, significant minimum-wage increase in this bill, coupled with automatic raises each year tied to the Unites States Consumer Price Index, will jeopardize the economic recovery we all seek.”[13]  In order to “sweeten” the counter proposal, Governor Christie promised to increase the earned income tax credit if the Democrats would support his proposal.[14]  The Bill now is slated for a second vote in the Legislature to decide whether to overrule Governor Christie’s veto.[15]

This Bill comes at a time when many states across the country are either increasing their minimum wage or have plans to increase it as the economy recovers from the recession.[16]  Since January 2013, twelve states have contemplated increasing their minimum wage other than minimum wage including Maryland, Hawaii, and New York.[17]  In nine other states, automatic wage increases took effect ranging from ten to thirty-five cents.[18]  Opponents to these increases largely state that potential harsh effects that could be felt by small businesses especially in conjunction with rising labor costs.[19]  However, most of these states seem to be taking action on par with President Obama’s platform of balancing the scale between the rich and the poor in America.[20]  In President Obama’s State of the Union Address last week he specifically noted that this growing gap between the rich and the poor needs to be addressed because it is the “defining issue of our time.”[21]

Taking their cue from President Obama, this issue of income inequality has been recognized by lawmakers in Albany and on Monday January 28, 2013, New York State Assembly speaker Sheldon Silver announced plans to introduce a bill that would increase New York’s minimum wage to $8.50 an hour.[22]  This 17% increase is also coupled with an automatic increase adjusted each year for inflation.[23]  According to Governor Andrew Cuomo, this increase could help more than 1.5 million New Yorkers and could likely push up earnings for those just making over minimum wage, a pay increase that could affect 1 in 5 workers statewide.[24]  Under the proposed bill, an estimated extra 1 billion dollars could be injected into New York’s economy and potentially create 7,300 new jobs in the State.[25]  Not all economists agree that however that this increase in minimum wage would truly create new jobs or help stimulate New York’s ailing economy.[26]  Nonetheless, Governor Cuomo has made this proposed minimum wage increase a significant part of his budget bills for 2013.[27]  Those budget bills are to be debated in the New York State Legislature over the coming weeks with the finalized budget for 2013 scheduled to be passed by March 31, 2013.

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[1] S. Budget & Appropriations Comm., A2162, 215th Leg., 2162 (N.J. 2012), http://www.njleg.state.nj.us/2012/Bills/A2500/2162_R1.PDF.

[2] N.J. Leg., A2162 Increases minimum wage to $8.50 then makes annual adjustments based on CPI Increases, N.J. LEG. (last visited Feb. 3, 2013), http://www.njleg.state.nj.us/bills/BillView.asp.

[3] Angela Delli Santi, Christie sent measure raising NJ’s minimum wage, Bloomberg Bus. Week (Dec. 12, 2012), http://www.businessweek.com/ap/2012-12-04/christie-sent-measure-raising-njs-minimum-wage.

[4] N.J. LEG., supra note 2.

[5] CBS N.Y., Associated Press, New Jersey Senate Committee Votes For Minimum Wage Increase, CBS N.Y. (Nov. 19, 2012, 7:48 PM), http://newyork.cbslocal.com/2012/11/19/new-jersey-senate-committee-votes-for-minimum-wage-increase/.

[6] Id.

[7] Santi, supra note 3.

[8] N.J. LEG., supra note 2.

[9] Id.

[10] Seth McLaughlin, N.J. Gov. Christie vetoes minimum wage increase, offers another, The Wash. Times (Jan. 28, 2013, 2:27 PM), http://www.washingtontimes.com/blog/inside-politics/2013/jan/28/nj-gov-christie-vetoes-minimum-wage-increase/.

[11] Id.

[12] Jenna Portnoy, Christie vetoes minimum wage bill, Democrats vow to put measures on ballot, N.J. (Jan. 29, 2013, 1:06 PM), http://www.nj.com/politics/index.ssf/2013/01/christie_minimum_wage.html.

[13] Id.

[14] Id.

[15] Id.

[16] Emma Beck, Growing number of states look at minimum wage hikes, USA Today (Jan. 29, 2013, 6:50 AM), http://www.usatoday.com/story/news/nation/2013/01/28/minimum-wage-increases/1862355/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+hometop4+(Top4+-+Flipboard).

[17] Id.

[18] Id.

[19] Id.

[20] Andrew Harrer, 2012 State of the Union Address, N.Y. Times (Jan. 24, 2013), http://topics.nytimes.com/top/reference/timestopics/subjects/s/state_of_the_union_message_us/index.html?inline=nyt-classifier.

[21] Jon Eligon, With Focus on Income Inequality Albany Bill Will Seek $8.50 Minimum Wage, N.Y. Times (Jan. 29, 2013), http://www.nytimes.com/2012/01/30/nyregion/albany-bill-would-raise-the-new-york-state-minimum-wage-to-8-50.html?_r=0.

[22] Id.

[23] Id.

[24] Teri Weaver, Higher minimum wage could create 7,300 new jobs in New York, study says, Syracuse (Jan. 28, 2013, 1:54 PM), http://www.syracuse.com/news/index.ssf/2013/01/higher_minimum_wage_could_crea.html.

[25] Id.

[26] Id.

[27] Teri Weaver, Debate rages over New York raising its minimum wage by $1.25 an hour, Syracuse (Mar. 13, 2012, 9:13 AM), http://www.syracuse.com/news/index.ssf/2013/01/higher_minimum_wage_could_crea.html.

Hall v. Dekalb County Government, 2013 WL 104810 (11th Cir. Jan. 9, 2013)

Facts: Plaintiffs alleged they did not have opportunity to access or train on the Building Automated System (BAS) as other white employees did, which adversely affected their marketability. Also, the County gave them few overtime and comp time than a white employee. Finally, they claimed that the County retaliated against them after receiving their EEOC Charges by reassigning them to other team.

Procedural history: The County submitted evidence and moved the court for summary judgment. The District Judge, recommended by Magistrate Judge, granted the County’s motion because the court found that neither refusal of giving access or train on BAS, nor giving few overtime and comp time than only one white employee, constituted an adverse employment action. As to retaliation, the magistrate found that reassignment was not an adverse employment action either because the pay, job duties and many thing else were almost identical to their previous positions. In response to the County’s motion, plaintiffs additionally claimed racial harassment, which was also not taken into account by the lower court because that was only a one-time incident.

Issues:
1. Whether plaintiffs made a prima facie case by asserting they had experienced an adverse employment action?
2. Whether plaintiffs were unlawfully retaliated by the County which reassigned them to another team and suspended one of them after receiving EEOC complaints?
3. Whether they were placed in a hostile environment in which one white employee called one of them “boy” on only one occasion?

Holdings: No, no and no.

Reasoning:
Discrimination Claim
1. They provided no evidence that limitations of their ability to train on and use the BAS affected the terms, conditions, or privileges or their employment as mechanics, or that limitation constituted a serious and material change to in their employment.
2. With regard to overtime and comp time, they failed to prove that similarly situated white workers were treated more favorably. They only claimed they had less overtime and comp time than one white employee, not white employees in general. Also, there was evidence showing they in fact made more overtime and comp time than white employees at the time.

Retaliation Claim
1. One of plaintiffs, Hall, did not allege what impact a written counseling had to his employment, thus being deemed non-adverse by the court.
2. No causal connection was established between EEOC complaint and Hall’s suspension by plaintiffs.
3. Plaintiffs failed to prove that the reassignment had adverse and negative impact their employment.

Hostile environment
Plaintiffs failed to bear the burden of proof. Only one occasion does not suffice.

Judgment: The case was affirmed.

Briefed by: Victor You