Category: Commercial

The importance of the temporary worker has increased in the last ten years due to gaps in staffing caused by downsizing, mergers and acquisitions. A temporary worker can be hired to fill in for an employee on leave or they can be used to augment a company’s permanent staff during seasonal fluctuations. Regardless of the reason for their employment, any business owner who hires temporaries should understand that they are entitled to certain considerations even though they will only be with you for a short time.

That entitlement rests on the answer to an important question of whether or not the temporary is an “employee” or an “independent contractor”. This is especially relevant when it comes to the area of discrimination. The Equal Employment Opportunity Commission (EEOC) says that temporaries are covered employees under the federal and state anti-discrimination laws if the right to control the means and manner of their work performance rests with the hiring company, rather than with the temporaries themselves.

It’s important to note that even though the staffing agency pays the temporary based on the number of hours reported by the business owner; it is the hiring company that oversees the temporary’s work. Moreover, the temporary uses the hiring company’s supplies and equipment and works on-site. In this instance, the liability for providing a discrimination free environment is not transferred to the staffing agency, as most companies would believe. The EEOC says the liability is shared by both the staffing agency and the hiring firm.

The issue of safety in the workplace is another area of vulnerability when it comes to hiring temporary workers. The Occupational Safety and Health Review Commission has taken the stance that companies employing temporary workers are primarily responsible for compliance with the Occupational Safety and Health Act with regard to those workers’ safety. The rationale for this position is again based on the fact that the hiring company controls the means and manner of their work.

Employing temporary workers also has ramifications for the hiring company when it comes to the Family and Medical Leave Act (FMLA). This law requires employers with 50 or more employees to allow any eligible employee to take up to 12 weeks of unpaid family and medical leave in any 12 month period, while still maintaining the employee’s health insurance benefits and usually, to restore the employee to the same or equivalent position upon his/her return. While the hiring firm does not grant FMLA leave to temporaries, they do have to count temporary workers as part of their contingent when determining if they meet the 50 or more criterion. They must also allow a temporary employee returning from FMLA leave to continue working at their site, even if that means letting another temporary worker go who was hired to replace the worker on leave.

The National Labor Relations Board considers hiring companies and staffing agencies to be joint employers for purposes of the National Labor Relations Act (NLRA) when both make determinations that affect the terms and conditions of the temporary worker’s employment. An important consequence of this joint employer determination for the hiring company is that it may be held liable for the staffing agency’s unfair labor practices toward the temporary worker it has hired.

And finally, hiring companies must include most temporary employees in their employee headcounts to see if their benefit plans qualify for a favorable tax treatment under the Internal Revenue Code. However, several courts have ruled that there is no provision in either the Internal Revenue Code or the Employee Retirement Income Security Act that hinders hiring companies from excluding temporary workers from their benefit programs.

As a nation we have been “thinking green” since the late 1960s. With the establishment of the Environmental Protection Agency in 1970, however, preserving the environment went from a popular sentiment to another regulatory requirement for corporate America.

When this concept got its legal teeth, it gave rise to another phenomenon, the toxic tort.

A tort is quite simply an injury to a person’s physical being or their financial situation caused by another person’ negligence or carelessness. The injured party has the legal right to be returned to the position they were in before the tort occurred. This is the basis for our country’s tort law and the beginning for every lawsuit resulting from a tort. A toxic tort is an injury caused by coming into contact with a toxic substance. Over the years, industry has been able to lengthen the list of substances that are considered toxins, which has created even more opportunities for individuals to sue.

Toxic tort cases are difficult to prove. An injured individual who believes they have been adversely affected by exposure to a toxin is only required to prove that their claim is more likely true than not true. The burden of proof is significantly less than that required in a criminal case. In a criminal case, the standard is proving “beyond a reasonable doubt.” But in a toxic tort case, the jury can have some doubts about the validity of the claim and the injured party can still win a favorable judgment.

Also keep in mind that an instance of toxic exposure doesn’t affect a single individual. An event like finding asbestos insulation in a building or dumping hazardous medical waste into a stream will subject large numbers of people to risk. A smart attorney will find as many members of the exposed “class” as they can because there is strength in numbers especially when it comes to convincing a jury. Settlements in class action suits are notorious for being huge amounts of money; so large in fact that these settlements have been the impetus behind the movement for tort reform in this country.

The irony of the situation is that large settlements stem from the very nature of tort law itself. Remember, the law requires that the injured party be returned to the position they were in before the tort. Since the effects of toxic exposure are usually irreversible, this is impossible. The only alternative for righting the wrong is to give the victim monetary compensation that is equivalent to the amount of damage suffered. When juries start to examine the types of damages suffered such as the cost of past and future medical care, the loss of earning capacity and pain and suffering to name only a few, the numbers head toward the stratosphere.

What does all of this mean for your business? It means two things. First an ounce of prevention is worth a pound of cure. Following the mandates of environmental regulatory agencies lessens the chance that you will be involved in a tort case. The second thing is that it is always good to have a backup plan. An insurance policy such as pollution legal liability coverage allows you to anticipate the risk before it happens by providing a means for paying settlements. It lets you transfer a risk to your carrier that could potentially be lethal to your bottom line.

Employees’ right to privacy when using electronic communications has become a major workplace issue within the last decade. What constitutes an invasion of privacy? When does an employer have the right to monitor electronic communications? And does monitoring bring up the Orwellian image of Big Brother?

The Electronic Communications Privacy Act  (ECPA) of 1986 is the only federal statute that deals directly with the interception of e-mail. The ECPA was enacted to extend an earlier legislation’s protection against the unauthorized access of wire and oral communications to include electronic communications. Although the Act doesn’t expressly mention e-mails, courts have interpreted the term “electronic communications” to include emails.

The ECPA does not, however, guarantee an employee’s right to email privacy in the workplace. There are three specific instances when an employee’s protection under the ECPA does not apply:

• The Consent Exception – Section 2511(2)(d) indicates that an interception of an electronic communication is considered legal if the person doing the intercepting is a party to the communication, or if one of the parties involved in the communication consents. The only exception to this proviso is if the purpose of intercepting the communication is to use it to commit a crime or tort. If an employer asks their employees to sign an employment agreement stating that their electronic communications will be monitored, the agreement will nullify the protection of the ECPA. 
• The Provider Exception – Section 2511(2)(a)(i) allows an officer, employee, or agent of a provider of wire or electronic communication service, whose equipment is used in the transmission of an electronic communication, to intercept, disclose, or use that communication in the normal course of employment if that person is involved in an activity which impacts upon the normal course of operations or upon the protection of their property rights. This means that intercepting emails to conduct quality checks is permissible as is intercepting them if you believe an employee is “stealing” the service by sending emails to friends on company time.
• The Business Extension Exception – Section 2510(5)(a) exception also covers interception done in the ordinary course of business.  It is similar in intent to the provider exception.

What all of these exceptions boil down to is that employers are justified in intercepting email messages as long as they have a valid business reason for doing so. However, if the business takes physical action to protect the privacy of email by installing a system that allows messages to be marked as confidential or by using passwords; or if the business tells employees that their email is private, the employer’s right to intercept may be considered voided unless one of the above stated exceptions can be proven.

Although there are still accusations that intercepting email is an outright invasion of a worker’s privacy even though the message may be written on company time and using company equipment, intercepting emails is becoming increasingly necessary. As the number of employees who sue because of harassment that occurred via email increases, businesses will find that limiting risk will depend upon knowing when you can legally intercept.

The term “stormwater” refers to any runoff after rain or snow from a barren piece of land, an area with vegetation, or constructed areas like paved streets and rooftops. Stormwater discharges can contain pollutants in large enough quantities to contaminate a water supply. If your construction project will disturb one or more acres of land, you may need a stormwater permit. If your project will disturb less than one acre, but its part of a larger development plan that will disturb one or more acres, you may also need a stormwater permit.

However, the determination of what the appropriate compliance is for your particular construction project is far more intricate than just a “yes” or “no” answer to the above scenarios. There are four criteria, which must be met to determine a permit is needed:

• Will your construction project disturb one or more acres of land?
• Will your construction project disturb less than one acre of land but is part of a larger development plan that will disturb one or more acres?
• Has your construction project been designated by the National Pollutant Discharge Elimination System (NPDES) permitting authority either on the state or federal level as one that must be regulated even though it will disturb less than one acre of land?
• Will stormwater from your construction site flow into a separate municipal storm sewer system or a body of water within the United States?

If you answered “yes” to any of the first three questions and “yes” to the last question, then you definitely need a stormwater permit. Keep in mind that in addition to state and federal regulatory agencies, some municipalities are also required to implement stormwater control programs. You need to check with your municipality for its requirements before beginning work on the project.

Your next step is determining whether to apply on the federal or state level. If your project is located in an area requiring a federal permit, you must apply for the EPA Construction General Permit (CGP). If your location necessitates getting a state permit, then you must meet the state’s general permit requirements. You can apply for an individual state or federal permit instead of the general one; however, the individual permit process can be much longer. One of the requirements of the EPA CGP is to assess the potential affects your project will have on federally protected endangered species and on any designated critical habitat on or near your site.

While state permit requirements may vary, the EPA has established some very specific criteria:

1.      Develop and implement a Stormwater Pollution Prevention Plan. It has to include:

• A description of the site that lists sources of pollution
• A description of methods that will be used to prevent pollutants from contaminating stormwater
• A description of controls for stormwater flow
• Documentation that supports that you are not in violation of the Endangered Species Act
• Documentation that supports that you are not in violation of local Total Maximum Daily Load requirements
• Clearly outlined roles of different operators
• The methodology you will use to inspect your site

2.      Submit a Notice of Intent (NOI) – This notice begins coverage under the general permit and includes a certification that the activity will not impact upon endangered species or historic places.

3.      Submit a Notice of Termination(NOT) – You need to submit this to EPA within 30 days after one or more of the following:

• Final stabilization has been accomplished on all portions of the site, for which the recipient of the permit is responsible
• Another operator assumes control over the parts of the site that have not achieved final stabilization      
• The operator has obtained an individual or alternative NPDES permit

In 1980, Congress passed The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) to address the issue of cleaning up hazardous substances at inactive or abandoned sites. The law is sometimes referred to as the “Superfund” because the cleanup program it established includes a Trust Fund used by the EPA and other agencies to clean up hazardous waste sites when the original polluter cannot be identified. CERCLA also requires the immediate reporting of any releases of hazardous substances at a construction site if the amount released meets or exceeds the level designated by the law as a reportable quantity.

The Emergency Planning and Community Right-to-Know Act (EPCRA), originated from CERCLA. This law requires the use of emergency planning, and provides citizens, local governments, and local response authorities with information regarding the potential hazards in their community. Before beginning the bidding process, the owner or developer needs to research the history of the construction site to find out if there was any hazardous substance use or disposal at the site. This review will give contractors a better understanding of potential risks and liabilities.

There is the likelihood that your project will be subject to Superfund or EPCRA requirements if hazardous substances are discovered during construction activities such as grading, digging or demolition. If your site was previously used for industrial or commercial activities that may have created hazardous substances, or there is the possibility that waste was disposed at the site, you should test the soil, surface water, and groundwater before beginning.

To determine if your construction site is subject to EPCRA emergency planning requirements, you need to determine if it meets both of the following criteria:

• An extremely hazardous substance or any substance regulated by your state or local authority is stored on site.
• A substance above the designated Threshold Planning Quantity is stored on site. The quantity varies by substance.

You can find additional information at: http://yosemite.epa.gov/oswer/ceppoweb.nsf/content/epcraOverview.htm

As for responsibility for meeting CERCLA requirements, if hazardous substances are discovered during construction, the contractor or subcontractor who first discovers it is responsible for notifying the general contractor, developer or owner. Because the hazardous substance was at the site before construction began, the developer or owner is responsible for seeing that the hazardous substances are handled and disposed of properly.

However, if you excavate or spread soils containing a hazardous substance, you may be responsible under CERCLA as an operator, arranger, or transporter:

• You may be an operator if you spread soil that contains a hazardous substance on the land.
• You may be an arranger if you dispose of a hazardous substance or arrange to have it removed from the construction site.
• You may be a transporter if you move hazardous substance from one location to another.

If there is a hazardous substance release above the reportable quantity for CERCLA, you must immediately notify the National Response Center at 1-800-424-8802 and your State Emergency Response Commissions (SERC) and Local Emergency Planning Committees (LEPC). If there is an extremely hazardous substance release above the reportable quantity for EPCRA, you must immediately notify your SERC/LEPC. If no notification occurs, the owner, contractor and subcontractor may all be held responsible.

The penalties for non-compliance are stringent. EPA has the power to impose administrative, civil, and criminal sanctions on a property owner and/or contractor. Administrative penalties and civil penalties can reach $32,500 per violation per day. In addition to fines, you may need to cover legal fees. If legal action is taken against your construction site, you could also be the recipient of increased scrutiny by regulatory agencies at all the construction sites that you operate.

Necessity is clearly the mother of invention, especially when it comes to language. As each new event causes a civilization to be at a loss for words to describe it, the civilization invents the words it needs. Hazardous waste management has certainly contributed its share of new words. Take, for example, the term “bioremediation.” This is the processof using microorganisms or their enzymes to return an environment that has been by polluted by contaminants to its original state. Bioremediation can be used alone to attack specific contaminants that can be degraded by bacteria, or it can be one step in a multi-pronged approach.

The first words in the lexicon associated with bioremediation that you need to be aware of are “in situ” and “ex situ.”  These are not strictly new words; they are actually Latin phrases dating back to the Romans, but they have taken on a new usage in the 21^st century world of hazardous waste management. In situ, or literally “in place” means treating the contaminated material on site while ex situ, or “away from the place” means  the contaminated material is removed and treated elsewhere.

Biomremediation can often be accomplished by biostimulation. This means that the contaminated environment is altered to stimulate the growth of  bacteria that already exist there that are capable of degrading those contaminants. This is usually accomplished by adding various forms of nutrients, such as phosphorus, nitrogen, or carbon. However, the problem with this process is that while the good bacteria is growing, so is the undesirable bacteria. These bad bacteria can cause what is known as biofouling. This can result in the clogging of pumps, which are used to remove the contaminants.

Another process that is sometimes confused with biostimulation is bioaugmentation. This usually involves studying the types of bacteria present in the area to determine if they are capable of degrading the contaminants. If there is no indigenous variety of bacteria that is capable of performing the job, then a new bacteria is introduced into the area that can do the degrading. In this process a sufficiently high dose of the desired bacteria is introduced into an area so they become dominant. There is no fouling; and when the job is done, the bacteria die and turn into carbon dioxide and water, which can be pumped out and removed.

Some other types of bioremediation include bioventing and biosparging. Bioventing is a technology that provides oxygen to existing soil microorganisms that have been deprived of oxygen in order to stimulate them to degrade any aerobically degradable compounds in the soil. Aerobically degradable means they can be degraded by the use of oxygen. The oxygen is introduced as part of the air that is directly injected into the contamination in dry soil. Bioventing uses low airflow rates to provide only enough oxygen to sustain the microorganisms’ activity.

Biosparging is a remediation process that also uses microorganisms that already exist in a contaminated area to degrade the contaminants. In biosparging, air and sometimes nutrients are injected into saturated or wet soil to increase the microorganisms’ activity. In addition, biosparging can be used to reduce concentrations of contaminants that are dissolved in groundwater, or adsorbed in the soil below the water table.

As industrial chemical processes become more sophisticated, the contaminants that are released from these processes will become more complex requiring more innovative ways of removing them from the environment. The technologies mentioned in this article are the beginning of the movement toward righting the wrongs done to the environment. Understanding what they are can help business owners look for the right kind of products and services that can keep them in compliance with the regulations established to maintain a green America.

The issue of product liability is a true legal thorn bush. Manufacturers, who fail to understand how liability can impact in bringing a new product to market, are apt to find themselves nicked by the thorns.

There are three ways that a manufacturer can be held liable: strict liability, negligence, or breach of warranty. Strict liability means that a manufacturer is responsible for injuries caused by a product whose defect makes it unreasonably dangerous, despite the fact that they exercised reasonable care in its development.

If a manufacturer is accused of negligence, it means that they did not act with reasonable care in making sure the product was safe. The most important difference between strict liability and negligence is that if a manufacturer is charged with negligence, they will not be held liable if they took reasonable care to look for defects and to avoid them. However, if a manufacturer is charged with strict liability, that fact that an unreasonably dangerous defect exists in the product means that no matter how much care they exercised in its creation, they are still liable.

A breach of warranty is a determination that an assurance or promise about the quality of a product is proven false; that is, the product is defective or not in the condition a reasonable buyer would expect it to be in. The party making the warranty, the manufacturer, is liable to the party to whom the warranty was made, the purchaser. A warranty can be expressed in the description of the product such as describing a piece of clothing as colorfast. An implied warranty means that the buyer can assume certain assurances about the product to be true unless other wise stated. That’s why furniture that is used as a floor model is sold “as is.” There would normally be an implied warranty that the furniture is without nicks or dents. However, by adding the phrase “as is” to the sale tag, it removes the implied warranty.

As a product manufacturer, you also need to be aware of the three different types of defects. The first is the manufacturing defect. This stems from the way a product was made, as opposed to the way it was designed or labeled. An iron that doesn’t get hot enough to take the wrinkles out of cotton clothing is an example of a manufacturing defect.

A design defect is one that is arises from the way a product was designed, rather than the way it was made or labeled. For example, if an auto maker manufactures a vehicle that is so lightweight it’s likely to rollover in a collision, that is an example of a design defect.

A product may also be defective if a manufacturer fails to adequately warn consumers about risks involved in using it that aren’t immediately obvious. The failure to warn defect, as this is called, is the foundation of a number of cases brought against many of the major pharmaceutical companies over the last few years.

Manufacturing defects, design defects, or inadequate warnings are not the only ways a product can be considered defective. A product may be deemed defective if it fails to meet minimum legal standards for a product. However, even if a product does meet minimum legal standards, that does not usually protect a manufacturer from liability.

It’s important to remember that the type of negligence will influence the calculation of damages. In strict liability and breach of warranty cases, damages are limited to compensatory damages. While in negligence suits, the defendant can be awarded both compensatory and punitive damages.

If you are an employer who has received an experience modification rating, it is imperative that you understand how it affects your workers’ compensation premium calculations to make your rating work in your favor.

Workers’ compensation coverage is known as a class rated insurance program. That means that an insurance company gives all employers within a state who fall into a given industry or class the same rate. This is an average rate which doesn’t take into consideration any individual characteristics of the employer. Since policy premiums are affected by the individual factors surrounding the business, carriers need a statistical method of differentiating one business in a given class from another. This is what an experience rating offers.

The experience modification rating is calculated individually for each employer who qualifies. In order to qualify, you would need to pay a premium in excess of $10,000 or a 3-year average premium of $5,000, depending on the state. The modification rating is a value that compares the claim profile of the employer to the claim profile that would be expected of an employer of similar payroll size in the same industry or class code. In this system, 1.00 is average, meaning the frequency and severity of the actual employer’s losses is equal to what the carrier would expect the employer to lose. A rating greater than 1.00 means the employer has experienced worse than expected losses during the rating period, and a rating of less than 1.00 indicates the employer experienced better than expected losses for the rating period.

An employer’s experience modification rating is calculated using claims data from the three most recently completed years. The current calendar year would be excluded because it would not give a full picture of the year’s losses.

Each claim’s paid and reserved value is listed. Then the frequency of claims is evaluated. An organization with only one large claim will be looked on more favorably than a second one with numerous smaller claims even if both companies’ losses are of equal dollar value. Since the second company is more prone to claims, for any claim over the highest dollar value claim, only a fraction of the amount in excess of that dollar value is used in the calculation. Also, in some states only a percent of the medical only claims are used in the formula. These adjusted claims are compared to the expected losses for the industry class and payroll size of the organization, and an experience modification rating is given to the individual employer. A rating that is less than 1.00 will reduce the company’s premium, while a rating that is greater than 1.00 will increase it.

Obviously, a company will want to find ways to lower their rating. One method a company shouldn’t try is to manipulate class codes when they are obtaining a policy in an effort to get the most payroll into the lowest rated class. This may actually raise the experience modification rating in the long run.

Because the rating is calculated from a comparison of actual losses versus expected losses, allocating payroll to less risky classifications will also put you in line for expected losses that are far lower than what you realistically experience. This increases the likelihood that your actual losses will be greater than expected for the classification, leading to a higher rating in the future. The best way to decrease your rating is to make safety a priority, which will eliminate losses and save you money in the long run.