Month: September 2020

DOL Proposes New Rule Clarifying Independent Contractor Status

The U.S. Department of Labor (“DOL”) has proposed a new rule interpreting independent contractor status under the Fair Labor Standards Act (“FLSA”). The purpose of the proposed rule is to provide clarity as to when a worker is an independent contractor, and not an employee, under the FLSA. If adopted, the proposed rule would operate as DOL’s sole interpretation of independent contractor status. Note that, as discussed below, DOL’s proposed rule does not affect Virginia’s new law on independent contractor status.

Currently, when determining whether an individual is an employee or independent contractor for purposes of FLSA, courts utilize the economic reality test.  Under the economic reality test, the key inquiry is whether “as a matter of economic reality” the workers are “dependent upon the business to which they render service.” Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1311 (5th Cir. 1976). Courts use a set of non-exhaustive factors to guide this inquiry, including: (1) the degree of the alleged employer’s right to control the manner in which the work is to be performed; (2) the alleged employee’s opportunity for profit or loss depending on his managerial skill; (3) the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers; (4) whether the service rendered requires a special skill; (5) the degree of permanency of the working relationship; and (6) whether the service rendered is an integral part of the alleged employer’s business. Real v. Driscoll Strawberry Assocs., Inc., 603 F.2d 748, 754 (9th Cir. 1979). Although courts frequently use these factors, confusion regarding application and interpretation persist.

Due to the varied application and interpretation of the FLSA’s economic reality test, DOL’s proposed rule seeks to clarify and provide a more consistent standard for evaluating whether a worker is an employee or independent contractor under the FLSA. Specific issues DOL addresses in the proposed rule include clarifying that “economic dependence” turns on whether a worker is in business for him- or herself (i.e., the worker is an independent contractor) or is economically dependent on a potential employer for work (i.e., the worker is an employee). The proposed rule also provides guidance on other factors, including the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss. As has always been the case, the parties’ actual practice is more relevant to the analysis than what may be described in any written contract.

DOL is accepting comments on the proposed rule until October 26, 2020. The link to comment can be found here.

DOL’s proposed rule on independent contractor status under the FLSA does not affect the new Virginia law on independent contractors that went into effect on July 1, 2020. The new Virginia law creates a legal presumption that anyone performing services for pay is an employee; the business has the burden to rebut that presumption by proving that the worker was properly classified as an independent contractor pursuant to the Internal Revenue Service’s guidance. Thus, for purposes of Virginia’s laws—including state taxation laws and state wage payment laws—the DOL’s proposed rule will have little effect. But for purposes of the FLSA, DOL’s proposed rule, if adopted, will apply.

Businesses need to proceed cautiously in classifying a worker as an independent contractor. The labor and employment attorneys at Vandeventer Black can assist in this analysis.

Federal Contractors Beware: New Executive Order Prohibits Certain Anti-Discrimination Training

On September 22, 2020, President Trump signed the Executive Order on Combating Race and Sex Stereotyping (“EO”). Under the EO, executive departments and agencies, the military, federal contractors, and federal grant recipients are required to include specific provisions pertaining to workplace training in every government contract entered into after November 21, 2020. The EO, which applies to all government contracts subject to Equal Employment Opportunity requirements, jeopardizes common anti-discrimination training programs, such as implicit bias training.

Under the EO, federal contractors are prohibited from conducting any workplace training “that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating.” The EO defines “race or sex stereotyping” as character traits, values, moral and ethical codes, privileges, status, or beliefs assigned to a race or sex, or to an individual because of his or her race or sex, and the term “race or sex scapegoating” means assigning fault, blame, or bias to a race or sex or to members of a race or sex because of their race or sex.

More specifically, contractors are prohibited from discussing the following concepts in workplace training programs:

      • one race or sex is inherently superior to another race or sex;
      • an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
      • an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
      • members of one race or sex cannot and should not attempt to treat others without respect to race or sex;
      • an individual’s moral character is necessarily determined by his or her race or sex;
      • an individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;
      • any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or
      • meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race.

Similarly, the heads of all agencies are directed to review their grant programs and require that recipients certify that they will not use Federal funds to promote these concepts.

Among other requirements in the EO, contractors must also send a notice—provided by the relevant agency’s contracting officer—to each labor union or representative of its employees advising the labor union or representative of the contractor’s obligations under the EO. Copies of these notices must be posted in conspicuous places available to both employees and applicants for employment. The EO also mandates contractors to ensure subcontractors and vendors comply with the EO.

Importantly, if contractors do not comply with the EO’s requirements, the contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts. Compliance will be enforced by the Office of Federal Contract Compliance Programs (“OFCCP”), which is directed to establish a hotline to investigate complaints received about contractors using prohibited training programs.

By its terms, the EO is effective immediately, but government contracts are not required to incorporate the above provisions until November 21, 2020. In the meantime, contractors should protect themselves from the adverse consequences of noncompliance by reviewing their current diversity and anti-bias training programs. Attorneys at Vandeventer Black are available to assist.

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Construction Industry Economics Respecting COVID-19 Mixed But Positively Trending

The Architecture Billings Index (ABI) is a composite index derived from monthly report surveys from American Institute of Architects (AIA) member firms located throughout the United States reporting on construction project activity the AIA refers to as “Work-on-the-Boards” (projects in the planning and design processes).  The data is compiled by the AIA’s Economics & Research Group, using a first-hand survey index from architectural firms as an economic indicator of nonresidential construction activity.

The data analyzes nonresidential construction activity approximately 9-12 months into the future, considered the typical time frame for a project to mature from design development through to construction. The ABI is viewed as one of the most even-handed barometers of expected construction and economic activity within that forward-looking time frame as the AIA is generally deemed as not having any overt political agenda.

The ABI scores are centered near 50, with scores above 50 indicating an aggregate increase in billings and scores below 50, indicating a decline in billings. The pace of decline during August 2020 remained at about the same level as of June and July 2020, reflecting continued uncertainties associated with the COVID-19 pandemic. Although the August ABI score remained steady at 40, fewer firms reported a decline in billings, indicating an optimistic outlook because firms reported their first increases since February 2020 of inquiries to them for new projects and because the value of new design contracts increased to a score of 46.0.

EDVA Norfolk is BACK!

The world has changed.  One day you are taking your boy to Disney, he is hugging every character in sight, and life feels carefree.  Two weeks later, you worry about going to the grocery store, and your son doesn’t even get to hug his grandparents while everything is sorted out.

But we are six months later.  The Courts have reopened!  There are at least a few criminal jury trials on the dockets.  Opinions are issuing.  And there is a lot to talk about if you care about the federal court system in Hampton Roads; including a new judge.  With that confirmation completed, what better time than to start talking again about 600 Granby Street?

So, we are back.  Look for updates in the coming weeks looking at motions to compel practice in the EDVA; an analysis of a special Halloween scare at Busch Gardens; an update on whether you can flip off North Carolina cops; and much, much more.

GAO Rejects Contractor’s Use of AIA Bid Bond for Federal Project

As all construction contractors know, the American Institute of Architects (AIA) provides a series of nearly 200 industry-standard consensus forms that define the relationships and terms involved in design and construction projects.  While these forms are appropriate for commercial projects, contractors that perform a mix of commercial and government projects should use caution when using them in a government contract context.

In a decision published on September 24, 2020, the Government Accountability Office (GAO) considered a federal contractor’s use of an AIA Bid Bond enclosed with the offer instead of a Standard Form SF24 bid bond that directly tracks the requirements of Federal Acquisition Regulation (FAR) provision 52.228-1.  A bid bond is often required by an owner to provide assurance that if the bidder is offered a contract based on its proposal but fails to then enter into the contract, the owner will be compensated for the difference in cost to award the contract to the next qualified bidder. 

In Matter of Pacific Dredge and Construction, LLC, B-418900, the GAO denied the protest of an offeror whose bid was rejected by the U.S. Army Corps of Engineers (USACE) as nonresponsive due to the commercial bid bond form submitted failing to provide the full range of protections specified in FAR provision 52.228-1.  The GAO noted that the use of a commercial bid bond form is not per se objectionable, but the analysis must consider whether the form is sufficient or whether it represents a significant departure from the rights and obligations required by the FAR and set forth in the SF24.  The GAO concluded that the AIA A310 bid bond submitted failed that analysis and so denied the protest.  In making that determination, the GAO rejected the Protester’s argument that the USACE’s acceptance of the same commercial bid bond for other projects had established a course of dealing between itself and the USACE and that the offer, therefore, should not have been deemed nonresponsive.

Should you have questions about this issue or any construction or government contracts matter, our team at Vandeventer Black is available to assist you.

Virginia’s Proposed Permanent Standard for Infectious Disease Prevention Regulations: A reminder that the opportunity for public comment closes September 25, 2020

As previously publicized, the Virginia Department of Labor’s (DOL) Safety and Health Codes Board (Board) Emergency Temporary Standard (ETS) for Infectious Disease Prevention became effective on July 27, 2020, but because of their nature would expire unless they or alternatively proposed regulations were made into permanent standards. When the ETS were published, DOL included its notice of intention to adopt them as a permanent standard, with an effective date of January 27, 2021.

As required by regulatory guidelines, DOL has solicited public comment regarding the adoption of a permanent standard for Infectious Disease Prevention. The proposed permanent standard can be reviewed here:  Proposed Permanent Standard for Infectious Disease Prevention for COVID-19. As previously publicized, the proposed permanent standard proposes adoption of the ETS.

The opportunity for public comment remains open, but is quickly expiring, tomorrow, September 25, 2020. So, regardless of view regarding the ETS or making them or any aspects of them permanent, those desiring to provide their input to the Board need to act quickly. To register a public comment about the proposed permanent standard, here is a link to DOL’s comment forum.

Understanding the Legal Aspects of Privacy in the Age of Smart Phones and Residential Security Cameras

This article is published in Southeastern Virginia Community Associations Institute’s (“SEVA-CAI”) Currents newsmagazine (Quarter 2 edition)  and is re-printed with permission.

With most people in modern society having smart phones that have cameras and video recording capability coupled with the soaring popularity of residential security cameras, one may wonder to what extent does one have a right of privacy should their image and/or behavior be captured.  One may also ponder such question when perusing through ample social media platforms, blogs, or news sites where countless photos and/or videos of persons other than the individual who uploaded such material are posted.  With the advent of these image-capturing and recording devices as well as the around-the-clock posting of such photos or videos of others, it should come as no surprise that, at least in Virginia, there is no right of privacy unless granted by statute.  See Evans v. Sturgill, 430 F.Supp. 1209, 1213 (W.D. Va. 1977).

The one—and only—statute in Virginia that addresses the right of privacy is found at Va. Code § 8.01-40.  This statute provides that if a person’s name, portrait or picture is used for advertising purposes or for purposes of trade without such person’s written consent, then such person is authorized to bring a civil lawsuit against any person, firm or corporation for their unauthorized use of the person’s name or image.  The person bringing this type action, if successful, could be entitled to equitable relief, such as an injunction, in addition to monetary damages.

It is important to note that using one’s name, portrait or picture “for advertising purposes” or “for purposes of trade” are two separate and independent statutory concepts.  See WJLA-TV v. Levin, 264 Va. 140, 160 (2002).  The Supreme Court of Virginia has ruled that a name is used “for advertising purposes” when “it appears in a publication, which, taken in its entirety, was distributed for use in, or as part of, an advertisement or solicitation for patronage of a particular product or service.”  Id. at 160 (citations omitted). As for what would qualify as an unauthorized use “for purposes of trade,” Virginia case law is not as robust on this particular concept; nonetheless, a court ruled that an interview of a person published in a magazine did not constitute a trade purpose (or for an advertising purpose).  See, e.g., Falwell v. Penthouse Int’l, Ltd., 521 F.Supp. 1204, 1210 (W.D. Va. 1981).

Although Va. Code § 8.01-40 does provide a limited right of privacy, there are two sets of exceptions to this statutory right.  Such exceptions pertain to items that are “newsworthy or matters of public interest” or for items that are “incidental to purpose of the work.”  See Williams v. Newsweek, 63 F.Supp. 2d 734, 736-738 (E.D. Va. 1999).  For items that are newsworthy or matters of public interest, such exception applies “so long as there is a ‘real relationship between’ the use of a person’s name or image and the report,” and “the report is not merely ‘an advertisement in disguise.’”  WJLA-TV, 264 Va. at 161 (citations omitted).  Further, for uses that are claimed incidental, “a publisher will only be held liable for the publication of an unauthorized picture if there is a ‘direct and substantial connection between the appearance of the plaintiff’s name or likeness and the main purpose and subject of the work.’”  Williams, 63 F.Supp. 2d at 737 (citation omitted).

Now, just because there is a limited right of privacy in Virginia does not mean there are no measures in place for certain types of unauthorized images or recordings taken.  Fortunately, several Virginia criminal statutes provide protection to the privacy of persons in other ways.  Below is a sample of criminal code sections that are aimed at protecting one’s privacy.    Depending on the circumstances, there may be additional criminal code sections that could be evoked.

  • Code § 18.2-216.1 makes it unlawful for a person, firm, or corporation to knowingly use the name, portrait or picture of any person for advertising purposes or for purposes of trade without having first obtained written consent from such person. A violator could be found guilty of a misdemeanor and subject to a fine between $50 to $1,000.
  • Code § 18.2-130 makes it a Class 1 misdemeanor for any person who enters upon the property of another and secretly peeps or spies into or through a window, door or other aperture of any building, structure or other enclosure intended to be a dwelling, and also makes it criminal for a person to peep or spy into a restroom, dressing room, locker room, hotel room, bedroom, or other enclosure where one has a reasonable expectation of privacy for the purpose of viewing any nonconsenting person who is nude, clad in undergarments, or in a state of undress.
  • Code § 18.2-130.1 makes it unlawful for a person to cause an electronic device to enter the property of another to secretly peep or spy into or through the window, door, or other aperture of any building or dwelling enclosure. A violation of this section is a Class 1 misdemeanor.
  • Code § 18.2-386.1 makes it unlawful for a person to knowingly and intentionally create a video or image of any nonconsenting person if such person is nude, clad in undergarments or in state of undress, which could be a Class 1 misdemeanor or a Class 6 felony, depending upon the age of the nonconsenting person.
  • Code § 19.2-62 it is unlawful for a person who intentionally intercepts or records any wire, electronic or oral communication without having at least one party to the conversation consent or where a person who is uttering an oral communication that has a justifiable expectation such communication is not subject to interception.  A violator could be found guilty of a Class 1 misdemeanor or a Class 6 felony depending on the underlying actions.

With the rising increase of technological advances, privacy may continue to erode with each innovation.  Yet, Virginia provides some statutory guards aimed at protecting people’s privacy.  Perhaps when in public people should be mindful that certain images and/or videos of themselves could be captured without recourse.

DOL Revises its FFCRA Paid Leave Rule To Narrow the Category of Health Care Providers that Can Be Exempted from the Paid Leave Requirements

On August 3, 2020, the Southern District of New York issued an opinion invalidating certain portions of the U.S. Department of Labor’s (“DOL”) Temporary Rule on the paid leave requirements of the Families First Coronavirus Response Act (“FFCRA”). The DOL has responded by revising its Temporary Rule. The revision, which goes into effect on September 16, 2020, makes the following changes to the FFCRA’s emergency paid sick leave (“EPSL”) and emergency Family and Medical Leave Act (“EFMLA”):

  • Revises the definition of “health care provider” to include only employees who meet the definition of that term under FMLA regulations or who are employed to provide diagnostic services, preventative services, treatment services, or other services that are integrated with and necessary to the provision of patient care which, if not provided, would adversely impact patient care.
  • Reaffirms the requirement that employees may take FFCRA leave only if work would otherwise be available to them. In other words, employees who are on furlough or are laid off are not eligible for EPSL or EFMLA.
  • Reaffirms the requirement that an employee must have employer approval to take FFCRA leave intermittently.
  • Clarifies that employees must provide required documentation supporting their need for FFCRA leave to their employers as soon as practicable.
  • Corrects an inconsistency regarding when employees may be required to provide notice of a need to take expanded family and medical leave to their employers.

The change to the definition of “health care provider” is the most significant revision. Under the FFCRA, employers may opt to exempt employees who are health care providers from EPSL and/or EFMLA. Congress’s intent in allowing employers to exempt these employees was to ensure that health care workers would be available to fight the COVID-19 crisis. The DOL’s initial Temporary Rule, however, defined health care provider so broadly that employers in the health care industry could exempt almost any employee, no matter how remote their work was to patient care. The revised Temporary Rule narrows the definition of health care provider considerably. Employers in the health care field who have exempted employees from EPSL and/or EFMLA should consult with legal counsel regarding this revision to ensure that the employees they have exempted meet this new definition.

The labor and employment law attorneys at Vandeventer Black are available to assist employers in complying with the FFCRA and navigating other COVID-related challenges.

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Technology for Community Associations in the Midst of Coronavirus

There is nothing like a global pandemic, complete with Gubernatorial Executive Orders to stay home, social distance and limit gatherings and CDC health recommendations to provide laser focus on how community associations can utilize technology. While the spotlight is on the present crisis, community associations may find that it fast forwards new and improved ways of conducting business utilizing technology.

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