“Time is an illusion. Lunchtime doubly so” – who is responsible for overtime working?

Way back in, ooh, last month we reported on Carreras –v- UFPS, a case on the extent to which an employer’s expectation of overtime working could be the basis of a disability discrimination claim even where it was the employee’s conduct which had generated it https://www.employmentlawworldview.com/when-overtime-goes-bad-employers-duties-to-clarify-expectations-for-disabled-staff/.

As if to shed some further light on that question, global professional services recruiter Morgan McKinley has kindly surveyed 2,600 professionals in the banking and finance sector on their overtime working, with these results:

81% of respondents regularly work beyond their contracted hours, with the longest extra hours by the most senior staff. As to why, 75% felt “obligated” or “very obligated” to do so. That is a strong word – my online thesaurus suggests as alternatives compelled, duty-bound, contracted, forced, required and the faintly concerning enslaved.
But the survey does not deal with the key question of how that sense of obligation arises and so we cannot say that it is necessarily anything said or done by the employer. It could equally well be personal ambitions for advancement or remuneration, anxiety about job security or peer pressure, so the question raised in last month’s case can still be asked – how far should the employer be responsible for this?
The issue is not a small one, either legally or from the employment relations perspective. Nearly 86% of the respondents said that their overtime working had an impact on their work/life balance, a “heavy impact” in over half of those cases. 6% of respondents said that they did not know, meaning either that their home life is fairly wretched even at its best and/or or that their idea of work/life balance has not progressed beyond being at work while still alive.
And what is it all for? 87% do it for love alone, it would appear, claiming not to receive any separate compensation for the additional hours. This strikes me as potentially rather disingenuous given salary and bonus levels among financial professionals relative to many others, but perhaps the best way of determining if you are paid extra for those additional hours may be to stop doing them and see what happens?
Never mind, at least there is the lunch break, surely? However, the survey indicates that the days of the long City lunch are clearly well behind us – 76% of respondents generally eat at their desk and scarcely a fifth even get to leave the building at all. So the late great Douglas Adams’ opening lines above were right after all.
Not a pretty picture in terms of overall hours, therefore, so what could really be done by way of reasonable adjustment for a disabled employee like Mr Carreras or for broader retention/engagement purposes? Two-thirds of employers allowed working from home (though with varying degrees of proactivity and willingness) and 60% offered flexible start or finish times. Just over half of respondents said that flexible working would make their lives easier, while a despairing 35% aimed simply for fewer meetings.

The Morgan McKinley commentary refers to “a widening gap between modern business philosophy around smart working and the reality of old-fashioned noses to the grindstone”, perhaps evidence of a continuing Monty Python Four Yorkshiremen approach to working as a professional. But this survey raises a separate question – since most employers are willing to offer flexible working and most employees seem to want it, is the blockage here really the employers’ attitude or the employees’? Morgan McKinley say that “Businesses are facing an alarming burnout and need to evolve work practices”, but really? Returning to last month’s case, UFPS could well have offered Mr Carreras more overtly than they did the ability to work flexibly and/or remotely, but would he have taken them up on it if they had? And if he had not, fearing for his bonus or prospects or status among his peers, would UFPS still have been liable? Surely there must be a point where an expectation based on the employer’s requests or demands can be distinguished from one driven by the employee’s own concerns, when that liability ought to cease.

Restrictive covenant survey responses – the case for change?

By David Whincup on July 6, 2016 Posted in Competition, Recruitment, Restrictive Covenants

On 16 June, following a Government Call for Evidence, we sent out a survey to over 4,000 of our clients and contacts in HR and Legal teams to ascertain attitudes to the use of restrictive covenants in contracts of employment and their inhibiting impact, if any, on competitiveness in the UK market. Our respondents ranged in size from fewer than 10 employees to over 2,000 and from only a year or two in existence to over a quarter of a century.

Since our survey went out, we have of course had the Brexit vote. This will have one of two consequences for the Government’s covenant review – either it will become a matter of no real consequence relative to the other issues which Parliament must now struggle with, or it will become a key weapon in the UK’s fight to maintain an independent business economy outside the EU.

The Government’s Call acknowledged that there remains a place for restrictive covenants that are reasonable in their extent, coherent in their drafting and appropriate to achieve their purpose. Sceptics will say (indeed, I already have: https://www.employmentlawworldview.com/desperately-seeking-substance-bis-call-for-evidence-on-restrictive-covenants/) that our existing Court system effectively provides this already by striking out covenants which fail any of those tests, and therefore that no reform is necessary. But is that a common view? In addition, do employers take the “care and maintenance” steps necessary to keep their covenants focused and so enforceable, or are they left to go to seed as notional deterrents to start-ups and/or unfair competition, but ultimately without teeth?

When our formal submission is lodged we will post a copy on this blog. In the meantime, though the deadline for submission of responses to the Call is not until 19 July, here is a sneak preview of the feedback we received:

The size of the task of reforming the law relating to covenants, if that is the Government’s direction, is evident from the extent of their use – of our respondents, over 93% had covenants in their standard terms of employment.
However, it does not appear that these covenants are always given the thought which would allow the employer to say with conviction that they were focused on the risks posed by each employee – only 61% of respondents consider whether those standard covenants are appropriate to each new hire, and an even thinner 54% look at that question again when an employee is promoted or changes role.
Our own experience is that departures from standard template covenants are relatively rare, indicating that even if such considerations do take place, they seldom lead to much tailoring of the restrictions. However, whether employers go through those hoops or not, they may be let down by their inability to prove it – less than 12% of our respondents retained any notes or other records of that consideration process.
There are some mildly contradictory responses in relation to the impact of covenants on employers considering new hires. Over 35% do not insist on finding out whether a candidate is bound by covenants at all, and a similar proportion have taken a deliberate decision to disregard them in any case. Put differently, however, that means that about two-thirds of employers do have regard to covenants in a candidate’s contract and do seek to respect them. Over 35% of respondents take external legal advice on the covenants in a new hire’s previous contract. Against that, in answer to the question of whether such covenants had blocked the hire of someone they would have otherwise have taken on, nearly 84% of our respondents said not. That does tend to suggest that the deterrent effect hinted at by the Government is relatively limited in practice.
37% of respondents say that restrictive covenants in a potential hire’s contract had damaged or delayed their achievement of corporate objectives to develop or deliver a new product or service. Clearly the Government’s concerns about an inhibition on start-ups and entrepreneurialism are not wholly without foundation. However, that statistic by itself reveals nothing about whether that new product or service would have damaged the previous employer had it been allowed to proceed unmolested, i.e. whether those covenants in fact protected a legitimate business interest.
That takes us to the question of what our respondents seek to achieve for themselves through the use of restrictive covenants. More or less 100% see them as measures to protect confidential information. That supports the view in the Call for Evidence that an action for a breach of confidence might be a viable alternative. That said, the same number use covenants to protect client relationships, about 75% to protect the stability of the workforce and 60% to combat unfair competition – these not being objectives achievable by actions for either breach of confidence or passing off/IP infringements.
One of the Government’s concerns in the Call was the extent to which employees necessarily understand the covenants when they sign up to them. A surprisingly high 40% of our respondents say that they explain this specifically to their new appointments on arrival.
In terms of actual enforcement, less than one respondent in five has taken court proceedings for breach of covenant or of IP rights. About half have sued or threatened to sue for breach of confidence. On the other hand, only 12% have faced action from their employee’s previous employer. That suggests that the deterrent effect, such as it is, is aimed mostly at the departing employee rather than the prospective employer. The common thread across our questions concerning enforcement was the very high proportion of claims, up to 80%, that were resolved by settlement. That suggests to us that employers in covenant disputes often get to a point they are happy with, implying that the covenants have had (to a greater or lesser extent) their desired effect.

Conclusion

We take two main conclusions from these survey results at this stage:

That there is no pressing case for the reform of the law relating to restrictive covenants. There seems evidence in our results that employers do generally pay some heed to them, both in their own appointments and when on the receiving end of someone else’s. There is no real evidence to suggest that covenants could effectively be replaced by provisions relating to confidentiality or intellectual property, and the 93% take-up for them suggests covenants to be an accepted part of the contractual landscape. Only one employer in 6 has been put off a prospective hire by his/her covenants.
That some employers are still not taking obvious steps by which they could give their covenants more muscle. While a healthy proportion say they consider their covenants per individual, only a minority seek professional advice and even fewer retain the evidence necessary to demonstrate their thinking, so creating an immediate hole below the waterline for any attempt to enforce them. Whatever the outcome of the Government’s review, good practice will remain that employers keep records of why they think their covenants are necessary.

Beware the possible costs of rejecting a good offer in Australian Fair Work cases

By Squire Patton Boggs on July 6, 2016 Posted in Litigation, Recent Cases, Severance Pay

The Fair Work jurisdiction in Australia is generally considered a ‘no costs’ jurisdiction, meaning that even if a party is successful in an action, it is usually unable to obtain a costs order against the loser.

However in 2012 the Fair Work Amendment Act 2012 (Cth) widened the exceptions to the ‘no costs’ rule by enacting section 570(2)(b) of the Fair Work Act 2009 (Cth). This section allows costs orders to be made where a party has committed an ‘unreasonable act or omission’ in the bringing or continuing of a claim that causes legal costs to be incurred by the opposing party.

So what classifies as an unreasonable act or omission for these purposes? Notably, recent case law has shown that one party’s failure to accept the other’s reasonable settlement offer may be considered an unreasonable act resulting in a costs order being made against it.
In Ferry v GHS Regional Pty Ltd (May 2016) a yard manager was dismissed after taking property without authorisation. He brought an unfair dismissal claim and represented himself in proceedings. Following a series of conciliation meetings, his employer offered him $3000 to settle the claim, which he rejected.

Mr Ferry’s claim was rejected by the Fair Work Commission (FWC) and a costs order was made against him to the tune of AU$13,875.50 to cover the legal costs incurred by his employer.

He argued that due to his lack of legal representation and experience he was not able to evaluate the prospects of his claim to determine if the offer was reasonable.

The FWC noted that, while self-represented litigants were indeed at a disadvantage, this would not be taken into account in determining if the rejection of an offer was unreasonable. Of significance here is that the employer had provided the employee with all the documents to be relied upon in proceedings and this information would and should have been sufficient for the employee to realise his claim had little support, even without legal input.

The FWC also placed weight on the fact that the letter of offer had expressly stated that the employer would seek costs if the claim failed.

Going the other way was Cugura v Frankston City Council (No 2). In this appeal decision, the employee claimed that his dismissal was an adverse action taken against him on the basis of his disability. The employer, in early September, offered that both parties bear their own costs and walk away from the matter. By early October, the employer had submitted affidavit evidence which more or less irrefutably contradicted the employee’s unsubstantiated claims. Despite this, Mr Cugura still did not accept the walk-away settlement offer.

The Federal Magistrates Court (FMCA) dismissed the appeal and made a cost order against him. It noted that whilst the refusal of the offer at the time it was made may not have been unreasonable, given the employee did not challenge the employer’s evidential case as to the reason for the termination and the way the trial was later conducted on behalf of the employee, the subsequent refusal was unreasonable and hence the costs order justified.

Lessons for Employers

Where applicable, draw to the attention of an employee (particularly a self-represented litigant) in as much detail as possible why their case has little or no prospect of success. If you have substantial evidence that contradicts an employee’s claim, this should also be brought to their attention at or before the point of the offer.
Ensure any settlement offer made to an employee is both clear in its terms and reasonable in all the circumstances – the harder-nosed the offer and the more onerous the conditions attached to it, the easier it will be for an employee to show their refusal was not unreasonable.
Include in all settlement offers a statement that, if the employee rejects the offer, the employer reserves the right to pursue costs under s 570(2)(b) of the Fair Work Act 2009.
When rejecting a settlement offer made by an employee, do so clearly and state in detail the reasons for rejecting the offer so that these can later be relied upon to show that the grounds for rejection were reasonable.
Because a costs award is dependent on the costs having been incurred as a direct result of the other party’s unreasonable conduct, ensure that you are able to identify what costs stem from what act or omission by the other side, e.g. by noting what time is spent post-offer on what part of the claim.
Remember that the costs threat can apply also to part only of a claim, e.g. where a proposal is made to dispose of a particularly weak or minor part of the proceedings leaving the main case extant.

New legislation on the posting of workers to Poland

By Malgorzata Grzelak on July 5, 2016 Posted in Business Immigration, Equal treatment, Secondment

New legislation to protect employees sent from outside the country to work for a limited time in Poland came into effect on 18 June. The legislation implements just in time the EU Posted Workers Directive, which Member States were required to bring into force within two years of June 2014.

The new legislation is intended to ensure that an employee posted to work in Poland enjoys conditions of employment in line with (or at least not worse than) those available to “local” employees under the Polish Labour Code and other relevant employment legislation. The relevant “protected terms” include working time and holiday/rest periods; pay (including overtime); health and safety; non-discrimination; and protections for minors and women who are pregnant or on maternity leave.

Employers with posted employees in Poland as at 18 June, or who intend to post workers in the future, should take particular notice of the following risks:

A fine of between EUR 250 (PLN 1,000) and EUR 7500 (PLN 30,000) will be payable if the Polish Labour Inspectorate finds that the employment status of the posted employee does not meet the criteria for a temporary posting as set out in the new legislation.

Action point: posting employers should consider whether the posting is a genuine posting within the framework of the provision of cross-border services.

The new rules on the joint and several liability for posted employees of contractors and subcontractors will potentially impact heavily on the construction sector where contractors often subcontract construction-related work to a foreign employer which then posts employees to Poland.

Action point: contractors and subcontractors need to take this new legislation into account when negotiating commercial agreements.

Employers (whether from inside or outside the EU) who had posted employees to Poland before 18 June have only 3 months to comply with the new regulations for those people.

Action point: all employers with posted employees in Poland need to ensure that they comply with the Polish Labour Inspectorate’s requirements and employment-related document storage requirements set out in the new legislation. These include that contracts and documents relating to pay and working hours be stored (whether on paper or in electronic form) in Poland, and that the posting employer is able to produce those documents to the Labour Inspectorate for up to two years after the posting ends. To facilitate this, the employer must designate a person residing in Poland to liaise with the Inspectorate, as required. In addition, it must notify the Inspectorate immediately the worker starts in Poland of the number of posted employees, start and end dates, certain personal data and of the employer’s justification for using a posted worker rather than a local hire.

On a less serious note, the new legislation – somewhat bizarrely – also appears to amend the Polish Museums Act. It refers to the restriction of “access to information regarding measures applied to ensure the safety of objects against fire, theft and other dangers threatening the loss or destruction of such objects”. Hopefully, this is not implementing a recent Governmental announcement of an intention to change the current rules obliging employers to keep employee-related data for as long as 50 years after the end of employment. In Poland we were expecting a shortening of this period rather than moving these papers directly into museums as historical objects.

Texas Judge Issues Nationwide Injunction Against New Persuader Rule

By Squire Patton Boggs on June 27, 2016 Posted in Department of Labor

Less than a week after a federal judge in Minnesota refused to enjoin the Department of Labor’s new Persuader Rule, and three days before the rule is set to take effect, a federal district judge in Texas has issued a sweeping order prohibiting the DOL from implementing its new rule.

We discussed last week how the DOL released new rules in March expanding the circumstances in which employers and their consultants may be bound by reporting requirements under the Labor-Management Reporting and Disclosure Act (“LMRDA”). These “persuader” rules require that employers, lawyers and consultants report to the DOL the fee arrangement and expenditures associated with it for any activity that was aimed directly at persuading employees regarding unionization.

In June, the Department announced that the rule would not apply to any agreements in effect before July 1, 2016, but business groups and legal associations around the country filed several suits in an attempt to block the rule from taking effect at all.

On June 22, a federal judge in Minnesota refused to issue a temporary restraining order blocking implementation of the rule in response to a lawsuit filed by an association of law firms and groups representing management in labor and employment matters, but noted that the plaintiffs were likely to succeed on the merits.

The case decided today in the U.S. District Court for the Northern District of Texas was brought by five business groups and 10 states against the DOL. In finding that the plaintiffs are likely to prove the new rule is arbitrary, capricious and an abuse of discretion, Judge Sam R. Cummings found, “DOL, despite a very lengthy Final Rule, never adequately explains why it is abandoning the prior, longstanding Advice Exemption now. DOL’s alleged interest in fostering ‘transparency’ would have existed ruing the entire lifetime of the LMRDA.” Judge Cummings also faulted the DOL for not conducting any studies or independent analysis to support its rule change.

Judge Cummings also indicated the plaintiffs are likely to succeed on their First Amendment claims, which stem from employers’ rights to express opinions regarding union organizing, and to hire and consult with an attorney; and their Fifth Amendment claims, which allege that the new rule is too vague to provide due process. (The new rule carries criminal penalties for violations.)

The ruling today, though good for employers and labor attorneys, throws the persuader rule into an even greater state of confusion. While it is likely the DOL will appeal Judge Cummings’ ruling, it’s not at all clear whether we will actually be operating under the new rule come July 1.

Minnesota Judge Denies Injunction Against Soon-To-Be Effective Persuader Rule but Notes Potential Issues with Rule

By Squire Patton Boggs on June 24, 2016 Posted in Department of Labor

We kicked off the week by reminding you the Department of Labor’s (DOL) new “persuader” rules are set to take effect July 1. The DOL’s new rules expand the circumstances under the Labor-Management Reporting and Disclosure Act (“LMRDA”) in which employers, labor consultants, and law firms must report fees and expenses associated with activity aimed at persuading employees against unionizing. Most notably, the rules expand the definition of persuader activities to include a number of indirect activities, such as holding educational seminars for employers, developing personnel policies, and drafting or editing materials distributed to employees.

On Wednesday, a Minnesota federal judge refused to issue a temporary restraining order blocking implementation of the persuader rule in response to a lawsuit and application for injunction filed by an association of law firms and groups representing management in labor and employment matters. U.S. District Judge Patrick J. Schiltz declined to issue the injunction on the grounds that plaintiffs failed to show they will suffer irreparable harm without one. However, all was not lost for employers and groups seeking to challenge the persuader rule. The silver lining is that the Court noted plaintiffs are likely to eventually “succeed in their claim that portions of the new rule conflict with the LMRDA.” Providing a lengthy analysis of the merits of the action, the Court explained “the root of the DOL’s problem is in its insistence that persuader activity and advice are mutually exclusive categories.”

The case is Labnet Inc., et al. v. U.S. Department of Labor, et al., case no. 0:16‑cv00844, in the United States District Court for the District of Minnesota. Two other similar challenges have been brought in District Courts in Texas and Arkansas. The Texas case in particular points to violations of employers’ constitutional rights and potential harm to attorney‑client confidentiality.

Employers, labor consultants, and law firms should monitor these developments, but should nevertheless continue to prepare to adapt to the new rules.

BREAKING: Chicago Catches Sick Leave Fever

By Shennan Harris on June 22, 2016 Posted in Compensation, Leave, Legislation

Today (June 22, 2016), Chicago’s City Council passed an ordinance requiring employers to provide paid sick leave to employees beginning on July 1, 2017. Mayor Emanuel spoke in favor of the ordinance following the Council’s vote, noting his “fervent wish” that the state of Illinois would follow suit and pass a statewide paid sick leave law. Chicago joins Minneapolis, Los Angeles and San Diego as the most recent cities to pass paid sick leave laws.

Chicago’s ordinance is, in many respects, similar to paid sick leave laws in other jurisdictions, but it has a few key differences and a few ambiguities, detailed below. In order to be eligible for paid sick leave under Chicago’s law, an employee must work for an employer for at least 80 hours in any 120-day period. Employees will accrue one hour of paid sick leave for every 40 hours worked, up to a maximum of 40 hours per 12‑month period (calculated from when the employee first became eligible to accrue paid sick leave (e.g., January 1, 2017 or upon hire)). All employees may carry over half of any unused, accrued paid sick leave hours to the next year, up to a maximum of 20 hours.

Chicago’s ordinance is unique in that it allows employees to carry over additional sick leave from one year to the next, to be used for absences that are eligible under the federal Family and Medical Leave Act (FMLA). The law provides that if the employee is FMLA-eligible, the employee may carry over an additional 40 hours of accrued, unused paid sick leave to the next year. This is where things get murky. The law states that employees may only use 40 hours of paid sick leave per year. However, if an employee “carries over 40 hours of Family and Medical Leave Act leave … and uses that leave, he or she is entitled to use no more than an additional 20 hours of accrued Paid Sick Leave in the same 12‑month period….” As written, the ordinance technically could be read to require an employee to carry over a full 40 hours of FMLA sick leave and use all of that leave before the employee could use sick leave for any other purpose during that 12‑month period. Surely, that is not the intent, but the way the ordinance is currently drafted certainly creates confusion as to whether an employee who has carried over FMLA sick leave is required to use up all of that leave before taking sick leave for any other (non-FMLA eligible) purpose. Hopefully, the City will realize this, make revisions or provide guidance clarifying the matter for employers before the ordinance goes into effect.

As in most other jurisdictions, employees may use paid sick leave for: the employee’s or the employee’s family member’s illness or injury, or to receive medical care, treatment, diagnosis or preventive medical care; for absences resulting from the employee or the employee’s family member’s status as a victim of domestic violence or a sex offense; or if the employee’s place of business or child’s school is closed due to a public health emergency. Notably, Chicago’s law has an expansive definition for family member, extending it to include any individual related to the employee by blood, or whose close association with the employee is the equivalent of a family relationship.

Employers should also be aware that the Chicago law requires that they provide notice of covered employee’s rights to paid sick leave with the first paycheck issued after the law goes into effect on January 1, 2017 (or the first paycheck after hire, for employees hired after that date). The City will be providing a form notice that employers can use for this purpose.

Missing you already – Justice Committee torpedoes no-show Government review on Employment Tribunal fees

By David Whincup on June 21, 2016 Posted in Employment Tribunal, Litigation

Those few of our readers who are inexplicably not committed followers of the House of Commons Justice Committee have missed a little cracker this week with the issue of its report on Court and Tribunal fees.

As everyone in the business knows, the introduction of fees in 2013 knocked the bottom out of Employment Tribunal case numbers, overall by some 70% in the following two years, and in relation to some categories of claim by as much as 78% (working time cases).

Following a series of judicial challenges, the Government found it politic to agree to undertake a review on whether fees had prejudiced access to justice, and/or had reduced the number of weak cases and/or had led would-be litigants to seek alternative (okay, cheaper) methods of dispute resolution.

Twelve months after it was started, and a full six months after its ETA, that review remains unpublished, even though the near-vertical drop in claim numbers can have little other tenable explanation. The Ministry of Justice has repeatedly failed to indicate when its review will appear, and there are some gratifyingly scathing comments in the Justice Committee report: “It is difficult to see how a Minister can urge his officials to progress a review which they apparently submitted to him four months previously“. One imagines some tense moments in the House of Commons bar over the coming weeks.

It is equally hard to avoid the conclusion that the Government’s review has found exactly what everybody told it at the time, i.e. that fees were too high, that people determined to bring vexatious claims would not be fussed about them anyway, and that the remission scheme was so complex and painful in its application that people would sooner just walk away, broken, rather like trying to get a delayed train refund out of Thameslink. There is also one particularly distasteful little nugget I had not previously known – your assets as assessed for remission scheme purposes will include any redundancy pay or pay in lieu of notice you have just received from your dismissal. Therefore, the mere fact of your dismissal can often make you ineligible for the fee waiver necessary for you to challenge it.

The Justice Committee (does that name sound as if they meet by candlelight, faces hidden in the shadows of their black pointy hoods, and each carrying a scythe, or what?) accepts at the outset that “some degree of financial risk is an important discipline for those contemplating legal action, and a contribution by users of the Courts to the costs of operating [them] is not objectionable in principle“. However, the Committee was clear in its own findings – describing the Government’s evidence to it as “even on the most favourable construction, superficial“, it concluded that ET fees have had no material impact on the number of vexatious or frivolous cases, and that access to justice for those who needed it most has indeed been significantly prejudiced by the level of the fee charged.

So what next on the ET fee front? If we go for a Brexit this week, then this question will be the least of the Government’s worries. If we do not, then for a time at least, no one will care anyway. The prospect of change in the near future, therefore, seems pretty minimal.

The Justice Committee tentatively floats some tinkering with case categories, relaxation of the remission thresholds, and a basic fee of £50. Whether the additional claim numbers which might be expected as a result of that reduction would be sufficient compensation to the Treasury for the smaller fee is unclear, but the Committee was very clear on the point – “if there were to be a binary choice between income from fees and preservation of access to justice, the latter must prevail“. Brave words indeed, but nothing the Government has not been quite happily ignoring for a number of years.

DOL’s New Persuader Rules Take Effect Soon – Are You Ready?

By Squire Patton Boggs on June 20, 2016 Posted in Department of Labor

Starting July 1, law firms doing labor and employment work could be required to disclose information about all of their labor and employment clients unless the firm has agreements in place prior to July 1 with those clients regarding “persuader” activity.

The U.S. Department of Labor released new rules in March expanding the circumstances in which employers and their consultants may be bound by reporting requirements under the Labor-Management Reporting and Disclosure Act. These “persuader” rules require that employers, lawyers and consultants report to the DOL the fee arrangement and expenditures associated with it for any activity that was aimed directly at persuading employees regarding unionization. Specifically, any work that (1) had a goal of persuading employees regarding unionization or (2) supplied the employer with information about employee or union activities in connection with a labor dispute. Under the version of the rule that has been in effect for more than 50 years, “advice” to an employer was not reportable activity, exempting most attorney-client relationships from the reporting requirements.

The new rules define “advice” narrowly and expand the definition of persuader activities from direct employee persuasion to include indirect persuasion, such as directing or coordinating supervisors; drafting editing or choosing materials to distribute to employees regarding unionization; holding seminars for employers that discuss persuasion strategies; and developing personnel policies in the context of organized activity or with persuasive intent.

Under the DOL’s new rule, reports would have to include fee arrangements and expenditures for “all advice and services on matters having a bearing on the relations between an employer and his employees,” for any client a law firm represents in the labor and employment realm. That means if a law firm does persuader work for any client, the firm will have to report its fee arrangements and billing for clients for whom they do reportable work and any other clients for whom they do other labor and employment work. Those reports could include charges for work on harassment investigations, discrimination claims and other issues that do not touch on collective bargaining.

The law imposes criminal penalties and personal liability on individuals, both at the employer company and in the consulting firm, who knowingly fail to make the required disclosures.

Agreements established before July 1, 2016 will still fall under the old rule, and law firms are rushing to get clients to sign such agreements before the new rules take effect. Employers should reach out to their legal counsel, if they have not discussed this issue already, to determine (1) whether counsel does any reportable work for the employer, (2) whether counsel does any reportable work for any other employers and (3) whether the employer is comfortable with counsel’s duty to report based on the answers to the first two questions.

Calling All Entrepreneurs – Australia Wants You!

By Squire Patton Boggs on June 17, 2016 Posted in Business Immigration

The election promises of Australia’s two major political parties may have few synergies, but one thing they both agree on is that Australia must do more to attract entrepreneurial talent to its shores.

To this end, both parties have pledged to introduce a new entrepreneur visa if elected. Information about the criteria of each of the proposed visas is limited, but here is a summary of what we know so far:

Liberal Party of Australia

Australian Labour Party

Visa will form part of the existing Business, Innovation and Investment (subclass 188, 888) visa.
Available to emerging entrepreneurs with innovative ideas.
Will require financial backing from approved third party investors.
Business, Innovation and Investment visas are currently valid for an initial period of 4 years and 3 months.
Provides a pathway to permanent residency.
Will be introduced in the second half of 2016.

2000 visas will be available annually.
Will require proven access to capital (circa AU$200,000) to invest in a start-up business or less if venture capital funding is obtained.
Will be valid for an initial period of 3 years.
Provides a pathway to permanent residency after 2 years.

Both parties have also stated their intention to introduce a new visa pathway for graduates who, in the case of the Liberal Party, have obtained a specialised doctorate or masters by research qualifications in science, technology, engineering or maths at Australian universities or, in the case of the Labour Party, for those graduates who have credible and genuine start-up ideas and the support of a higher education institution.