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Posts Tagged ‘damages’

Philadelphia Burdens New Fair Workweek Law to Impact 130,000 Workers & Employers

Posted on: January 9th, 2019

By:  John McAvoy

On December 7, 2018, the Philadelphia City Council passed the Fair Workweek Employment Standards Ordinance by an overwhelming margin of 14-3. Effective January 1, 2020, the objective of the Ordinance, which was introduced in June by Councilwoman Helen Gym (D), is to provide more predictable hours, advanced scheduling, among a slew of other protections for the roughly 130,000 workers in the food, service, and hospitality industries. The Ordinance’s seven co-sponsors hope the new restrictions will help break the cycle of poverty plaguing the nation’s fifth largest city.

To that laudable yet impracticable end, the Fair Workweek Ordinance imposes significant restrictions and standards on large service industry employers with respect to how they schedule, hire, and pay their workers. It also provides for a private right of action against employers that permits recovery of back pay, presumed damages, liquidated damages up to $2,000, attorneys’ fees and equitable relief.

After much debate with local businesses, the new Ordinance as enacted covers only those “retail establishments,” “hospitality establishments,” and “food services establishments” that employ 250 or more employees overall and have 30 or more locations worldwide, including chains and franchise locations.

New York, San Francisco and other large municipalities through the country have been implementing similar “fair workweek” laws since 2014. Philadelphia is the second largest city to adopt the practice. Like similar legislation enacted across the country, Philadelphia Fair Workweek Ordinance imposes four main requirements on employers:

  1. Schedules in Advance. Employers must provide new hires with a written, good faith estimate of the employee’s work schedule. That schedule can change, but the initial estimate must include: the hours the employee can expect to work over a typical 90-day period; whether the employee can expect to work any on-call shifts; and “a subset of days and a subset of times or shifts that the employee can typically expect to work, or days of the week and times or shifts on which the employee will not be scheduled to work.” The employee can request a different work schedule, but the employer is free to grant or deny the request for any reason that is not unlawful. Employers will also have to consider employee work schedule requests, including requests not to be scheduled for certain shifts, days, times or locations as well as requests for changes in hours worked. Additionally, employers must provide employees with a written work schedule at least 10 days before the first day of a scheduled period (14-days effective January 1, 2021). Employees must receive notice of any proposed changes to the posted work schedule as promptly as possible and prior to the change taking effect, and they have the right to decline to work any hours not reflected on the posted work schedule.

 

  1. Predictability Pay. The Ordinance requires employers to compensate employees for changes to the work schedule. This is commonly referred to as “predictability pay.” The amount of the mandated compensation is to be determined. There are, however, exceptions to this requirement. For example, if the employee initiates the schedule change, or there’s a mutual agreement between the employer and employee, an emergency, or for one of the other less common reasons outlined in the Ordinance, then employers are under no obligation to provide predictability pay.

 

  1. Rest Between Shifts. An employee may decline, without penalty, any work hours that are scheduled or otherwise occur less than 9 hours after his or her prior shift ends. However, if the employee works that second shift, the company must pay that employee $40.

 

  1. Offer Work to Existing Employees. Employees must offer extra shifts to current employees before hiring a new employee. However, if existing employees turn down the offer of extra shifts or if extra shifts would implicate overtime pay, then employers are free to hire new employees.

Employers who violate these requirements subject their business to potential liability. The Free Workweek Ordinance makes it unlawful to interfere with, restrain, or deny the exercise of protected rights under the ordinance. Retaliation is also prohibited, with a rebuttable presumption of retaliation for any adverse action within 90-days of an employee exercising protected rights, unless the adverse action was due to well-documented disciplinary reasons that constitute just cause. The Office of the Mayor of Philadelphia is charged with enforcing the new Ordinance, raising questions as to enforcement policy and litigation.

Prudent employers should start preparing their businesses now, Even though the new requirements and standards imposed by the Ordinance do not take effect for another year. Complicating matters further is the fact that the Ordinance, as a whole, is rather vague and ambiguous in terms of the restrictions it imposes and the ways in which those restrictions will be enforced. Although the legislature should eventually issue regulations to resolve some of the uncertainty, it is unclear when that will occur or if it will happen before the Ordinance takes effect next January. As a result, employers are left fending for themselves to make sweeping changes to their scheduling, hiring, and payment policies, practices, and procedures towards complying with the Ordinance.

The uncertainty and other difficulties employers will likely experience navigating the exacting requirements of Philadelphia’s Fair Workweek Ordinance is nothing new. Employment law is rapidly changing and evolving in Philadelphia at an unparalleled pace. The Fair Workweek Ordinance joins the ranks of similarly taxing legislation such as Philadelphia’s Salary History Ban Law and its Ban-the-Box Law, to name but two of the many legislative minefields presently impacting local employers.

Given this is a rapidly changing and developing area of the law, employers are encouraged to charge someone in their human resources and/or compliance departments with staying current on Philadelphia’s new employment ordinances and regulations. Noncompliance with an applicable regulation or ordinance, no matter how vague it may be written, can lead to civil liability and ignorance of the law is no defense. Therefore, it is important that employers stay apprised of the rapidly changing employment laws. The person charged with this responsibility should understand the impact a new or proposed law might have on the business and recognize what, if any, changes in the law require an amendment to company policies. It is also suggested that employers consult with experienced legal counsel to ensure that their policies and procedures are fully complaint with new legislation.

Need help understanding/navigating Philadelphia’s new legislation or want to learn more about what Philadelphia’s Fair Workweek Ordinance means for your local business? Let Freeman Mathis & Gary’s employment experts help. Feel free to call or email John McAvoy (215.789.4919 [email protected]) for assistance with your company’s policies and procedures.

The Effects of the California Wildfires Continue

Posted on: January 7th, 2019

By: Matthew Jones

The California Insurance Commissioner recently issued a press release regarding the extensive insured losses from the numerous California wildfires. Those losses total over $9 billion, and are even expected to rise. The losses span across various lines of insurance coverage, including commercial, residential, personal and commercial vehicles, and agricultural, to name a few. In light of the substantial losses and long process toward recovery, the Commissioner issued a notice to all insurers asking them to expedite claims and issuing checks immediately for four months of out-of-pocket costs. This notice also requested that the insurers help out the policyholders as much as possible in being lenient regarding document production, which will likely be difficult for policyholders given the damages sustained. The Commissioner also issued a “declaration of emergency” to allow insurers to obtain help from out-of-state claims adjusters in order to deal with the high volume of claims. However, these out-of-state adjusters must be educated and versed in California consumer protection laws, which are much more stringent than other states.

So in a time of heartbreak and sorrow, the Commissioner is coming to the rescue to help ease the insurance claim process and help the thousands of victims get back on their feet. However, despite these efforts, extensive litigation is likely to come from these tragic events as homeowners try to make themselves whole again.

If you have any questions or would like more information, please contact Matthew Jones at [email protected].

Statutes Affecting Indemnification Agreements in Construction Contracts

Posted on: November 6th, 2012

By: Kamy Molavi

It is quite common for parties involved in construction projects to include indemnity provisions within their construction contracts. In recent years, a majority of states have enacted anti-indemnity statutes that restrict, modify, or invalidate indemnification agreements in construction contracts. With respect to the degree of fault against which indemnity may be barred, two types of anti-indemnity statutes have emerged across the nation. We refer to them as “sole negligence” statutes and “any negligence” statues.

Nearly half of the state anti-indemnity laws void provisions that attempt to require the indemnitor to indemnify the indemnitee for the indemnitee’s sole negligence or willful misconduct. Indemnity in “sole negligence” states is allowed when the indemnitor and indemnitee are each partially at fault, or a portion of fault can be attributed to a third person. Stated another way, under these statutes an indemnitor may have to pay for the injury even if the indemnitee is 99 percent responsible for the injury. Further, in most states that only invalidate “sole negligence” provisions in indemnity contracts, workers compensation and insurance agreements are not affected by the “sole negligence” indemnity prohibition in the statute. However, several state statutes are silent on these issues. Examples of typical “sole negligence” anti-indemnity statutes are those enacted in Alaska and Georgia.

Several states have enacted versions of a different variety of anti-indemnity statute, referred to as “any negligence” states. This type of anti-indemnity statute voids contract provisions that require indemnification for losses or damages arising out of the indemnitee’s negligence, whether sole or partial. Thus, this type of anti-indemnity statute would necessarily include “sole negligence” prohibitions.  In states that have “any negligence” anti-indemnity statutes, the indemnitee is more restricted from shifting the risk onto a non-negligent party than in “sole negligence” states.

Recent case law addressing anti-indemnity laws has highlighted some of the fine points in the statutes and public policies of the states. One current issue is whether the contract qualifies as a “construction contract” and thus is subject to the state’s anti-indemnity statute.  All of the states that have analyzed this issue recently have decided that the term “construction contract” in the anti-indemnity statutes should be interpreted broadly. Georgia courts, for example, have interpreted the anti-indemnity statute broadly to apply to assignment agreement transferring the maintenance and repair of a residential subdivision to the homeowners association. Likewise, New Mexico has interpreted the applicability of its anti-indemnity statute to encompass maintenance activities in improving a property and agreements for rental equipment to be used in construction activities.

Another recent trend involves the interplay between indemnity and insurance, and specifically those statutes which contain an “insurance savings” clause. These situations arise in states where the anti-indemnity statute expressly prohibits contractual provisions that require the indemnitor to indemnify the indemnitee for the indemnitee’s negligence, and also expressly state that the code section does not affect the validity of an insurance contract and/or any other agreement issued by an insurer. An example of an insurance savings clause is in the Alaska statute that states it does not affect the validity of insurance policies. The interplay between these two statutory provisions has not uniformly interpreted among the various jurisdictions. As one example in a coverage dispute, the Delaware Supreme Court found that despite the public policy against indemnification for someone else’s negligence, whether the indemnification is direct or indirect, the “insurance savings provision” is enforceable. The Delaware Supreme Court stated that insurance companies are sophisticated and should not be able to use the anti-indemnity statute as a shield to decline coverage after it is purchased.

Some states are statutorily silent with respect to the validity of indemnity agreements in construction contracts, but their courts recently have addressed the issue. For example, the Nevada Supreme Court recently found that a party can be contractually required to indemnify another for the indemnitee’s negligence, but only if the contract for indemnity contains “an express or explicit reference to the indemnitee’s own negligence.” Thus, a general statement requiring the indemnitor to indemnify the indemnitee for “any and all claims” is not sufficient in Nevada.

In summary, if a loss arises and any applicable contract contains an indemnification clause, it is imperative for construction contractors and designers, as well as their claims adjusters and attorneys, to carefully review governing statutes and court opinions in order to determine whether the indemnification clause is enforceable, and if so, to establish the types of claims and damages to which the clause may apply.

This article is excerpted from materials for a Defense Research Institute seminar presented in Phoenix, AZ, in September of 2012. For a copy of the complete article, including a chart of various statutes, click here.

The Marketing Risks of Insurance Related Litigation

Posted on: October 4th, 2012

By: Seth Kirby

Nationally syndicated radio host Clark Howard recently targeted auto insurer Progressive in his “Clarkrageous Moment,” a segment in which he expresses his outrage over various topics.  In this instance, his outrage stemmed from an auto accident in Maryland that caused the death of Kaitlynn Fisher.  Ms. Fisher was insured by Progressive, and her family submitted a claim for uninsured motorist benefits under her Progressive Policy, which was not immediately paid.  Mr. Howard was outraged that Progressive had the audacity to participate in a lawsuit against the at fault driver, arguing that Ms. Fisher, its own insured, was responsible for the accident.  Mr. Howard came across this case because of the social media efforts of Ms. Fisher’s brother.  He posted about the situation on his personal blog, and the story went viral, resulting in an outpouring of online reports and numerous mentions in various main stream media.

With condolences to the Fisher family for their loss, and putting aside the merits of the case, from a procedural standpoint, Progressive was simply exercising their rights as a UM carrier to determine who was responsible for the accident.  Such a system is used in many states and often requires a judgment against the tortfeasor before a UM carrier is required to pay damages to its insured.  The fact that such arguments are allowed, does not automatically shield a carrier from public backlash should their ligation decisions be challenged.  Indeed, in this instance, the fact that the carrier had a legal right to argue that the accident was the fault of their insured was either overlooked by many media outlets, or buried beneath headlines like “Progressive insurance on defense after dodging paying family of a client killed in a crash.” Matthew Barakat, Chicago Sun-Times, August 17, 2012.

While it is often said that any press is good press, I doubt that applies in this situation.  Not only did Progressive lose the underlying case, it has also suffered a blow in the eyes of the public.  But what could have been done to stop the backlash other than avoiding the suit altogether?  Insurance litigation has always required carriers to take public positions (in the form of pleadings) that are often against the financial interests of their insureds, but until recently, such lawsuits were not the subject of internet blogs and Facebook posts.  In our current social media environment, it seems that the marketing impact of insurance litigation must be considered along with the merits of each case.  When litigation is warranted, care must be taken to educate any interested media outlets regarding the purpose of the litigation.  Of course, doing so may be easier said than done.

Recent Court Rulings Suggest Homeowners’ Associations May Selectively Enforce Covenants

Posted on: September 6th, 2012

By: Marc Bardack

In two recent rulings, state trial court judges have rejected homeowner claims against homeowners associations (HOAs) for failing to enforce covenants against a neighbor.  These rulings raise the question of whether HOA’s can enforce neighborhood covenants selectively as they see fit.

In Sugarloaf Residential Property Owners Association, Inc. v. Greenwald, the homeowners sued the HOA for arbitrarily enforcing landscaping and other property improvement covenants against them and not against their neighbors.  In ruling against the homeowners, Gwinnett Superior Court Judge Michael Clark held that the HOA had the right to enforce covenants, but not an affirmative duty to do so.  He interpreted the HOA’s governing documents as providing that right but not making it an obligation.  Thus, the court effectively ruled that the HOA could enforce covenants as it saw fit.

Judge David Dickinson reached a similar conclusion in the Forsyth County Superior Court case of Lake Astoria Community Association, Inc. v. Ingmire v. Furr where the homeowner sued the HOA for failing to enforce neighborhood covenants consistently.  Similar to the declarations in the Gwinnett County case, Lake Astoria’s Declarations provided that the HOA could not “be held liable for any injury, damages or loss arising out of the manner or quality of approved construction on or modifications to any lot.”  Judge Dickenson ruled that this provision precluded Mrs. Ingmire from arguing that the HOA had a legal duty to enforce its architectural standards or design guidelines.  Again, the implication with this ruling is that the HOA is free to enforce its covenants when it sees fit to do so.

Of note is that neither court specifically addressed the “arbitrary and capricious” enforcement of covenants argument advanced by the homeowners.  While some would argue that such rulings negate the purpose of having an HOA and neighborhood covenants, homeowners are not without recourse.  For example, in both the Gwinnett County and Forsyth County cases described above, the homeowner did sue the neighbor who allegedly caused excess surface water runoff.  A question remains as to whether a homeowner would have standing to sue a neighbor for violation of a covenant when that violation did not cause direct damage to the homeowner.  In other words, it is clear that a homeowner could sue his next door neighbor for directing excess surface water onto his property and flooding his basement, but it is not as clear that the homeowner could sue the neighbor down the street for putting an addition on a house without HOA approval. Additionally, homeowners always have the option of getting involved on their HOA boards in order to push the enforcement of covenants.

Nonetheless, these rulings do provide some relief to HOAs and their board members (as well as their insurers) who dread getting dragged into the middle of disputes between neighbors.  These rulings cast a broad measure of protection even if enforcement is in fact selective.