Regulatory Updates for Staffing-September 2023
This year has brought an unprecedented wave of regulatory changes for U.S. employers. The changes derive from a combination of legislative and judicial actions. As a practical matter, it is impossible for the typical small to medium sized company to keep up with all of it. At Staffing Legal
Lawsuit Raises the Question of a Recruiter's Legal Duty to the Candidate
Recruiting lawyers can be lucrative, as demonstrated in my coverage of a Texas noncompete case last year. There, a legal recruiter's former employer won a $3,640,132.60 damage award against the recruiter for misappropriating trade secrets and violating his non-competition agreement. The story included a list
Liability for Client's Unlawful Discrimination: Reduce Your Risk
Elwood Staffing case provides guidance on avoiding liability for client misconduct
Staffing firms are routinely dragged into employment litigation because of discriminatory conduct by a client. When a temporary worker asserts a discrimination claim based upon client conduct, it is standard practice for the plaintiff's lawyers to include
BIOPOINT VS CATAPULT SOLUTIONS: $2,503,457 IN ATTORNEYS' FEES ADDED TO $5,061,444 DAMAGE AWARD
The US District Court for Massachusetts has added $2,503,457 in attorneys' fees to the massive damage award that I wrote about last week. The Final Judgement against Catapult Solutions and its Managing Director Andrew Dickhaut, including fees and court costs, totals $7,589,191.27.
BIOPOINT VS CATAPULT SOLUTIONS GROUP: NONCOMPETE CASE OF THE YEAR
Inside job yields a $5,061,444 damage award - ruling pending on $2,503,457 attorneys' fee claim
The largest damage awards in unfair competition cases usually involve some form of trade secret misappropriation, and this one is no exception. The last one I wrote about ($3,640,
EEOC's "Artificial Intelligence" Settlement - Not Really an AI Case
But a Maryland technology attorney says she has a real one against a prominent legal search firm
It's no secret that the EEOC is ramping up its scrutiny of the use artificial intelligence in the employment context. The Agency in 2021 announced an initiative to:
examine more closely
Clueless Client Gets Staffing Agency Sued
“We don’t pay overtime here.”
In the staffing business, the agency has all the responsibilities of an employer, but often only minimal connection with what is happening to its workers on assignment. A Fair Labor Standards Act case in Georgia against Simplified Staffing Solutions, Inc. and its client, Wanzer
Lawsuit Demonstrates the Perils of Using IC's in California -
Independent Contractor decides he is an employee after fee dispute arises
In theory, California's infamous ABC test can be met if your independent technology consultant:
A. controls his own work.
B. performs work outside the usual course of the hiring entity's business, such as a one-time
Florida Staffing Agency Operators Sentenced to Prison for Immigration and Tax Fraud
The United States Justice Department continues to keep the staffing industry in its sights. On July 31, 2003, the Department issued the following press release:
The operators of several Key West, Florida, labor staffing companies, including PSEB Services JD, Inc., Paradise Hospitality Solutions LLC, Paradise Hospitality Group LLC, Paradise Hospitality
Illinois Set to Join New Jersey in the War on Staffing
Manufacturers ask Governor to veto House Bill (HB) 2862 before August 15 effective date
Pending amendments to the Illinois Day and Temporary Labor Services Act are predicted to have dire consequences for industrial staffing agencies serving Illinois. Similar to the recently enacted New Jersey legislation that I wrote about last
COURT RULES THAT NEW JERSEY CAN WIPE OUT INDUSTRIAL STAFFING IN THE STATE
Federal Court denies industry challenge
Earlier this year I wrote a story entitled: "New Jersey Declares War on Industrial Staffing." Well, it looks like New Jersey just won the war. In what may be the most important legal ruling ever impacting the staffing industry, a Federal Court in
Update on Massive Non-Compete Damage Award
Last year I wrote a story about a huge damage award in a staffing firm noncompete case. Specifically, on September 15, 2022, a Texas Federal Judge ruled that international legal search recruiter Evan P. Jowers is liable to his former employer for misappropriating trade secrets and violating his non-competition agreement.
What's Worse Than a Wage-Hour Class Action?
Maryland staffing firm and its owner find out the hard way
A class (or collective) action for overtime pay is certainly unpleasant for the employer, but a wage-hour investigation by the United States Department of Labor can be far worse for a non-compliant employer. This is because the Department of
NEWS FLASH - USCIS TO ALLOW REMOTELY VERIFIED I-9's IF EMPLOYER USES E-VERIFY AND FOLLOWS PROCEDURES
REMOTE RE-VERIFICATION ALSO ALLOWED FOR COVID-ERA "CATCH UP" VERIFICATIONS IF THE EMPLOYER USED E-VERIFY AT THE TIME OF ORIGINAL REMOTE DOCUMENT VERIFICATION
In my last post I alerted readers to the potential for USCIS to allow remote verification of I-9 documentation to continue after expiration of the COVID
U.S. Department of Labor Takes on Questionable Independent Contracting Practices
The traditional risk of using independent contractors, a/k/a "1099's," is an audit by the IRS or state taxing authorities. In recent years, state auditors have been more aggressive than the IRS because of manpower limitations at the IRS. This may change in the future
Supreme Court Ruling Creates New Religious Accommodation Duty
Decision is a game-changer likely to encourage litigation
I have often written about staffing firms that get caught in lawsuits because their client failed to "reasonably accommodate" a temporary worker's disability under the Americans with Disabilities Act. I have not written about the duty to accommodate
New York Set to Ban Noncompete Agreements; Illinois Set to Crush Industrial Staffing
Acts awaiting Governors' signatures signal ongoing anti-business sentiment in states that need business the most
It is not official yet, but a bill is on its way to the desk of New York Governor Kathy Hochul that broadly bans noncompete agreements in the Empire State: "[e]very contract
Staffing Firms Still Falling into Paradoxical I-9 Trap
Common sense might lead one to believe that carefully documenting a foreign national’s lawful work status is a good thing that government regulators would applaud. But common sense is not necessarily a good guide when it comes to navigating the regulatory maze.
Another Staffing Firm Dragged into an ADA Lawsuit Because of Client's Actions
It seems that even some very large, and presumably sophisticated, clients of staffing firms do not understand that they have the same non-discrimination obligations to temp workers as they do to their direct employees.
Minnesota Bans Non-Competes, Part 2
Don't forget contracts of temporary workers and independent contractors (and employee handbooks)
As I reported in my last post, Minnesota has banned non-compete agreements prospectively, effective July 1, 2023. This means that agreements signed on or after that date must not contain provisions that prevent employees and independent
Minnesota Bans Non-Competes
Minnesota Governor Tim Walz just signed a law banning noncompete agreements in the state. Unlike restrictions in some other states, the ban is not limited in scope to certain wage groups or occupations. It is universal, the only exception applying to business owners when the business is sold.
This Just in - It is Now Illegal to be an Employer in California
At least that is the witticism circulating among the labor and employment defense bar these days. And like any good joke, it has an element of truth. Approximately 50% of all court cases filed in the Golden State today are employment claims.
Bookkeeper and Tech Administrator Hijack Staffing Firm
New York staffing firm ATD Technology LLC has filed suit against its former bookkeeper and Chief Operating Officer, alleging that they "have acted in concert to retain control over ATD’s domain name, email accounts and financial books and records
Remote I-9's Ending - What Staffing Firms Need to Know
For the last 40 months or so, staffing firms have had the luxury of completing I-9 forms without the usual "in-person" examination of the employee's documentation demonstrating authorization to work in the US. With the national COVID-19 emergency behind us, that is ending. Last October, U.
Hayes Medical Staffing Sues Jobot and Former Employees
Hayes Medical Staffing has filed a lawsuit in U.S. District Court for the Southern District of Florida against former employees Amy Eichelberg, Allison Patierno, and Scott Simon, as well as their new employer, Jobot LLC. The complaint (attached below) contains claims for breach of contract, misappropriation of trade secrets,
Healthcare Client Payment Defaults on the Rise
By Bill Josey Contact: wjosey@staffinglaw.com
I continue to see cases involving nonpayment of large sums by healthcare clients. As I have mentioned before, the best way for a client to get a free loan is to hire a staffing firm that allows them to "borrow" free
US Department of Labor Sues Staffing Firm and its CEO for Overreaching Employment Agreements
The US Department of labor has filed an enforcement action against Advanced Care Staffing, a Brooklyn, NY firm that focuses on healthcare staffing. The lawsuit, filed in the U.S. District Court for the Eastern District of New York, also names Advance Care's CEO, Sam Klein, as defendant.
Co-Employment is a Reality in Employment Discrimination Claims
I have written in the past about staffing firms suffering from their client's alleged sins. Here are two more cases illustrating the trend, both of which just happen to involve Spherion.
Takaro Jamison v. Daye North America and Spherion Staffing. This Charleston, South Carolina, U.S. District Court
Spherion Sues Terminated Franchisee for PPP Loan Fraud
In an unusual case (Complaint attached below), Spherion has filed suit against a terminated Montgomery, Alabama, franchisee and its owner for, among other things, filing for a fraudulent $278,279 PPP loan under Spherion's name, using temporary employees employed by Spherion as the basis for the loan. The
Wage and Hour Lawsuits in California
California case illustrates how a $237,753 wage claim creates exposure to a $9,472,867 loss in court
There is a wry expression circulating within the employment law defense bar these days: "It is per se unlawful to be an employer in California." This statement derives from
TEKsystems Dragged into Twitter Class Action Over No-Notice Layoffs
It's a trend - staffing firms are getting sued for clients' actions
On April 4, 2023, a noted plaintiff-side employment law firm launched a class action lawsuit in San Francisco against Twitter and staffing giant TEKsystems, alleging that both firms violated the federal and California WARN Acts
Illinois Enacts "Any Reason" Paid Leave Law
I came across an excellent article from Cozen's Austin G. Dieter describing the new Illinois law mandating paid leave for any reason, including vacations. The law, entitled the "Paid Leave for All Workers Act," goes into effect January 1, 2024. Here's a summary from
Adecco Sues Longtime Client for Transferring Temp Workforce to Competitor
Staffing giant seeks to recover $1,497,432.44 in conversion fees - did the client read the contract?
I have not seen a temp workforce transfer case this large in a long time, although I did report on two smaller cases last year. It appears the staffing agency may
Skilled Nursing Center Sues Staffing Giant LRS Healthcare for Economic Losses
Last week I wrote about how a single temporary tech worker on assignment can expose a staffing firm to liability for a massive data breach. This week I report on how two temp nurses on assignment at a healthcare facility caused Massachusetts regulators to bar patient admissions to the client&
California University System Sues Kelly Services for Data Breach by Tech Consultant
This could be a tech staffing firm's worst nightmare. The University of California Board of Regents has launched a lawsuit (copy attached below) against Kelly Services asserting that an employee of one of its sub-subcontractors downloaded the names, addresses, birthdates, and Social Security numbers of approximately 179,629
Chicago Staffing Firm Seeks to Avoid Brokerage Fee After Sale of Business
Failure to terminate brokerage contract may result in an obligation to pay brokerage fee years after broker introduced the buyer and seller
Chicago-area staffing firm Alternative Staffing, Inc. has sued Transact Capital Partners, LLC, a Richmond, Va. business brokerage and advisory firm, seeking a court declaration that it does not
New Jersey Declares War on Blue Collar Staffing
"New Jersey Temp Worker Bill of Rights" creates extraordinary regulatory burdens on staffing firms and clients
Among other things, this just-enacted law requires covered temporary workers in New Jersey to be paid the average compensation rate and benefits (or the cash equivalent of the benefits cost) paid by
