New OSHA Regulations Jeopardize Post-Accident Drug Tests and Safety Incentive Programs

July 2016
By Alan E. Seneczko

On May 12, 2016, OSHA issued a Final Rule modifying its recordkeeping regulation, requiring employers in certain industries to electronically report illness and injury data that they are required to record in their OSHA logs. No big deal, right? Unfortunately, the big deal was buried deeper in the Rule, in comments relating to modifications to the regulation governing Employee Involvement (§1904.35).

Under the existing regulation, employers are required to establish a way for employees to promptly report work-related injuries and tell them how to do so. The amended regulation, which was scheduled to take effect on August 10, significantly expands this obligation in two ways. First, it requires employers to establish a “reasonable procedure” for employees to report injuries promptly and accurately, and goes on to state that “a procedure is not reasonable if it would deter or discourage a reasonable employee from accurately reporting a workplace injury.”

According to the interpretive comments that accompany this amendment, this means employers are prohibited from disciplining employees for delay in reporting a work injury in circumstances where the employee may not immediately realize that he has suffered an injury, such as in cases involving cumulative trauma. In those instances, in order for its reporting procedures to be considered “reasonable,” an employer must allow the employee to report an injury within a reasonable timeframe after realizing that he has suffered it.

Second, and even more significantly, the revised regulation contains new anti-retaliation provisions. It requires employers to inform employees of their right to report injuries free from retaliation, and prohibits them from discharging or discriminating against employees for doing so. It thus incorporates the existing statutory prohibition against retaliation found in Section 11(c) into the recordkeeping regulation, making retaliation an independent basis for a citation, which can then be “abated” through reinstatement and back pay – and effectively eliminates the 30-day statute of limitations that would otherwise govern such a claim.

Even more distressing is that, according to OSHA, this prohibition limits post-accident drug testing to only those situations “in which employee drug use is likely to have contributed to the incident, and for which the drug test can accurately identify impairment caused by drug use.” This last requirement is particularly interesting, and completely disingenuous, given that a drug test generally only reveals drug use, not impairment. OSHA contends that this regulation prohibits employers from testing employees who report repetitive motion injuries, back strains, bee stings, injuries caused by improper guarding, etc., since the requirement might “deter” employees from reporting their injuries, without contributing to an understanding of why the injury occurred or otherwise improving workplace safety. As a result, post-accident testing must be very narrowly drafted. [Note:  This does bring to mind a client situation several years ago, when an employee reported to his supervisor with a bloody, lacerated hand, claiming he did it at home hours earlier – presumably to avoid having to submit to a post-accident drug test.]

OSHA also uses this new regulation to attack safety incentive programs, such as drawings for employees who are injury-free, or bonuses to groups of employees who have not reported an injury over a specified period of time. According to OSHA:  “[I]t is a violation for an employer to use an incentive program to take adverse action, including denying a benefit, because an employee reports a work-related injury or illness, such as disqualifying the employee for a monetary bonus or any other action that would discourage or deter a reasonable employee from reporting the work-related injury or illness. In contrast, if an incentive program makes a reward contingent upon, for example, whether employees correctly follow legitimate safety rules rather than whether they reported any injuries or illnesses, the program would not violate this provision.” 

 Although these provisions of the Final Rule were scheduled to take effect on August 10, 2016, OSHA has pushed back the effective date to November 1, 2016, ostensibly to conduct “additional outreach” to employers, and to develop educational materials and enforcement guidance on the issue. In the meantime, a number of trade associations have joined together to file a lawsuit seeking to enjoin the new anti-retaliation provisions as they relate to post-accident drug testing programs. See, Texo ABC/AGC Inc. v. Perez, Case No. 3:16-cv-01998 (N.D. Tex.).

Stay tuned. If you would like more information, or have questions about the new regulation and/or how it may affect your post-accident drug testing or safety incentive programs, contact Attorney Alan E. Seneczko at (262) 560-9696, or alseneczko@wesselssherman.com.

Machinist Union Pension Fund and Its Trustees Accused of Misusing Retirement Monies

July 2016

James B. Sherman, Esq. 

The federal court for the District of Columbia has ordered trustees of the International Association of Machinists National Pension Fund, to repay $200,000 to the fund, plus an additional $40,000 as a civil penalty.  As recently reported by the U.S. Department of Labor, the fund and its trustees were sued by the Secretary of Labor for alleged violations of the Employee Retirement and Income Security Act (ERISA). The lawsuit accused the trustees of breaching their fiduciary duties to the IAM Union Pension Fund participants and beneficiaries by, among other things:

·         Unlawfully soliciting and accepting gratuities from plan service providers.

·         Spending/permitting others to spend fund assets lavishly on unnecessary trips, parties, extravagant food, wine and accommodations.

·         Creating conflicts of interest and failing to select plan service providers in the best interests of participants and their beneficiaries.

In a consent decree accepted and ordered by the court on July 19th, the defendants agreed to re-pay the very large sum of money and civil penalty, but admitted to no wrongdoing.  The trustees also agreed to adopt a number of measures designed to prevent activities of the sort the D.O.L. alleged in its complaint were unlawful under ERISA. For example, the IAM Pension Fund must now use an independent search consultant to identify service providers and must, going forward, prohibit the same person from acting as both a consultant and manager for the fund. The Fund must also maintain records for 6 years, presumably to allow for monitoring of its use of fund assets.

Of course this is hardly the first case alleging that union fringe benefit dollars were being misused for parties, junkets, wining and dining for trustees and their friends. In the past the Teamsters’ and other labor union employee benefit plans have faced similar allegations.  The consent decree in this case should be welcomed by current and former members of the Machinist Union who count on the IAM Pension Fund for their retirements, as well as their employers who contribute to the Fund.  

Employer Liable for Terminating Employee for Refusing to Share Tips, Under Minnesota Fair Labor Standards Act

July 2016 

Generally employment in Minnesota is at-will, meaning that either employer or employee can terminate the employment relationship at any time, for any lawful reason.  However, there are limits to at-will employment, including terminations on the basis of unlawful discrimination, retaliation for making a protected complaint, or according to a recent Minnesota case, refusing to share tips. 

The Minnesota Fair Labor Standards Act (MFLSA) makes certain employer actions unlawful.  Most commonly known are those provisions that require that employers pay minimum wage and overtime for most types of employees.  However, the MFLSA also contains several other provisions, including one that “prohibits an employer from requiring an employee to contribute or share a gratuity . . . with the employer or other employees.”  The court determined that an employee who was terminated because his employer felt he wasn’t properly sharing his tips with other staff, was fired illegally, and entitled to backpay. 

This case provides the lesson that employers should make sure that they are not making any illegal requirements a condition of employment.  In this case, the employer presumably thought the employee was being unfair to other employees, and terminated the employee on that basis.  However, under Minnesota law, the employer was not allowed to require the employee to share, and therefore when the employee was terminated because of this requirement, the termination was illegal.  

For assistance in determining whether an action is acceptable under the MFLSA and other state and federal employment laws, contact Attorney James B. Sherman at jasherman@wesselssherman.com or 952-746-1700. You can also find more information on our website at www.wesselssherman.com. 

New OSHA Recordkeeping Rule May Require Many/Most Minnesota Employers to Revise Their Drug & Alcohol Testing Policies and Procedures … ASAP!

July 2016

James B. Sherman, Esq. 

Buried in the new recordkeeping rule from the Occupational Safety and Health Administration (OSHA), are provisions likely to affect many if not most employers who do drug and alcohol testing of employees in Minnesota.  State law, specifically the Minnesota Drug and Alcohol Testing in the Workplace Act (DATWA), prohibits any testing in the absence of a written policy distributed to employees in advance of any attempt to test.  As a result Minnesota employers doing drug or alcohol testing have (or by law should have) in place a detailed written policy that is compliant with the DATWA’s very stringent requirements. Among other things, policies must specify how and under what circumstances testing may occur; e.g. pre-hire, reasonable suspicion, and limited use of random testing.  Unfortunately, the OSHA’s soon-to-be-implemented recordkeeping rule contains provisions that are forcing employers to reevaluate and revise their written policies to comply with certain new requirements. With the new rule set to take affect August 10, 2016, employers that have not already done so have little time to address these new requirements. 

Employers familiar with DATWA know that it is one of the most restrictive Drug and Alcohol testing statues in the country. Random testing is restricted to “safety-sensitive” positions and while “reasonable suspicion” testing is allowed, employers must comply with very particular procedures which must be detailed in their written policies. When the OSHA first issued its new reporting rule, the focus in the public was primarily concerned with its provisions regarding on-line reporting of workplace injuries. However, provisions ostensibly designed to address employer policies that might deter employees from reporting workplace injuries, may require many if not most Minnesota employers to revise their current Drug and Alcohol testing.

Provisions in the OSHA’s new rule that are likely to impacting testing include the following requirements:

1.       Employers must establish “reasonable procedure[s]” for employees to report work-related  illnesses or injuries.

2.       Employers must affirmatively advise employees that they cannot be retaliated against for  making a report.

3.       Reporting procedures may not deter nor discourage employees from reasonably reporting  work-related injuries or illnesses.

Buried in comments accompanying the OSHA’s new reporting rule are statements that post-injury/accident Drug and Alcohol testing may deter employees from reporting them. The OSHA has advised that in order to comply with its new reporting rule, as of August 10^th any post-accident or injury testing must:

a.       Be limited to instances where employee drug or alcohol use likely contributed to the  incident; and

b.      Test only for impairment at the time of the incident (versus using testing methods that  identify drug use only generally).

Because many Minnesota employers have in place written Drug and Alcohol policies required by MDATWA, with many if not most of those policies providing for post-accident or injury testing in all instances, revisions should be made prior to August 10, 2016 when the new OSHA reporting rule goes into effect. Rather than completely overhauling such policies, an addendum or “rider” may suffice; the important thing is to issue any changes to employees, in writing, consistent with the mandates of MDATWA for Minnesota employers.

Employers should consult with experience counsel, without delay, to adopt any compliant measures necessitated by the new rule.

Questions? Comments? Contact Attorney James B. Sherman at jasherman@wesselssherman.com or by phone at 952-746-1700 for more information, or if you have any questions about Drug and Alcohol testing or OSHA policies.

Construction Industry Double-Breasting

If You Try To Set This Up Yourself, Without Legal Counsel – Watch Out!

July 2016
Richard H. Wessels, Esq.

Here at Wessels Sherman we have seen an uptick recently in legal challenges by unions to construction industry double-breasting schemes. By using the word “schemes”, I don’t mean it in the bad sense at all. There is nothing improper or illegal about double-breasting. Unions hate it, but it’s not illegal. In the simplest terms, double-breasting means having a union entity and a non-union entity.

The fundamental principle is that in order to withstand a legal challenge, the two entities must indeed have separation. This is where it gets tricky. No single factor is determinative, it is like weights on a balance scale. There are many factors that can be evaluated and among these are ownership, interrelationship of operations, management, handling of labor relations, interchange of employees, and then a whole variety of factors such as geographic separation, bookkeeping, personnel policies, use of equipment, telephone, business cards, and advertising to mention just some. Again, no single factor is determinative, but some of these factors such as interchange of employees are definitely more important than others. You have big potential problems if the same workers have hours in both the union and non-union companies.

What makes this area even more confusing is that much depends on how you are challenged. Challenges can come from a union trust fund audit, NLRB charge, grievance alleging a labor contract violation, or a demand for recognition. We have definitely seen increased activity in this area, particularly as union pension funds are desperately looking for more money. A good potential source of money for these union trust funds is to allege that the non-union entity is not properly double-breasted and trust fund payments going back many years should have been made under the union contract with the union entity. In other words, “same book with a different cover”. You can see the problem here, and if you have any concerns, give us a call so that we can help you with risk evaluation and setting up better evidence if you are challenged.

Questions? Contact Richard Wessels at (630) 377-1554 or by email at riwessels@wesselssherman.com