Delaware Department of Labor (DDOL) Office of Anti-Discrimination recently released its fiscal-year statistics relating to the charges filed and resolved in FY2009.  I posted previously about the stats, including some (hopefully) helpful charts that show the trends over time. 

Since the statistics were released, I've had some time to process the data and focus more on what is most relevant to Delaware employers. 

Charges, Charges, Charges

If you are an employer who received a Notice of Charge of Discrimination for the first time in 2009, you are not alone. There were more charges filed with the DDOL last year than any other year for which the statistics are published. In FY2009, the DDOL accepted 728 charges—an increase of nearly 20% over FY2008.

Retaliation Claims Continue to Reign as Enemy #1

It may not come as a surprise that the most-often filed charge was a retaliation charge. Charges of discrimination alleging retaliation constituted more than 70% of the charges filed last year. One reason for such a high number is that retaliation is often added as a second allegation in charges alleging other types of discrimination. Also, once a charge has been filed, it can be amended to add other claims. So, if an employee files a charge alleging gender discrimination and is subsequently terminated, she is likely to amend her charge with an additional charge of retaliation.

The increase in the number of charges filed that contain a retaliation claim is staggering. In FY2008, approximately 30% of all charges filed with the DDOL contained a retaliation claim—even less in FY2005-2007. Those numbers went up by 130% over the last fiscal year. It is fair to say that retaliation claims are, by any measure, an employer’s number one biggest threat in the context of discrimination claims.

Race- and gender-based claims enjoyed equal growth over last year—both accounting for an additional 40% of all claims filed. After retaliation, race (56.9%), and gender (46.4%) discrimination ranked as the second and third most commonly filed claims.

Defining “Success”—Reasonable Cause Findings Issued in FY2009

There is some good news for employers among these statistics. Overall, there number of reasonable cause findings issued by the DDOL remains small. On average, only 1.5% of all claims filed resulted in a cause finding. The DDOL’s long investigation periods, though, may skew these numbers. Because the average processing time for a charge is nearly a year, the reasonable-cause findings issued in FY2009 were likely issued for charges filed in FY2008.

The most successful claims in FY2009 were those based on age—reasonable cause was found in just less than 4% of all age claims filed. National origin was the second-most successful, with reasonable cause findings issued in 2.5% of those claims.

No reasonable cause findings were issued in three types of claims: (1) gender discrimination claims filed by males; (2) Asian-race claims; and (3) religious-discrimination claims.

Looking Ahead

The lesson to be learned from this data for Delaware employers is this:

The increased likelihood that your organization will be named in a charge means that you must be ever diligent in documenting the events of the workplace and being on high alert for potential issues as they arise and, especially, when dealing with an employee who complains of discrimination or harassment (formally or informally).

 

Also see:

2009 Stats on Delaware Charges of Discrimination

As you may know, our little blog was named 1 of the top 100 law blogs by the American Bar Association. We are so honored to have been chosen!  We're in the "Geo" (as in "geographic-specific") category with 9 other excellent legal blogs.   And, until tomorrow at 5 p.m., you can cast your vote for us as the best in our category--an honor we'd be thrilled to have.

To vote, you'll have to register with the ABA Journal.com site but it takes just a minute to sign up. All you'll need to provide is an e-mail and a password.

Click here to register to vote. 

Click here to see the list of all 100 blogs.

So please, take a minute or two and get registered and vote for our blog.  And then pass this e-mail along to your friends, family, local postman, kid that cuts your grass, or anyone else with Internet access.

Thank you, thank you, and thank you again!!

Delaware attorney and blogger Francis G. X. Pileggi of the always popular Delaware Corporate and Commercial Litigation Blog has posted an outstanding discussion with Delaware Supreme Court Chief Justice Myron Steele. 

It’s well worth stopping by Francis’ excellent blog to read the insightful commentary of the Chief Justice. 

Have you ever wanted to carry the entire Delaware code in your pocket? Have there been times you’d wished you’d had Title 19, Delaware’s labor statutes available when you’re not at your computer or near a law library?  Well, if you are the owner of an Apple iPhone, now you can.  The entire Delaware code is now available as an app via the iTunes store for just $19.95.  That’s insanely inexpensive compared to the price of the multi-volume book set you’d have to buy to get the Code in print.  The app gives users access to the full Code in a searchable format, making it easy to find that obscure cite in a flash.

Of course, law firms have been very reluctant to the adaptation of the iPhone, so many lawyers who have iPhones also have to lug around a Blackberry to check their work e-mails.  Still, a Blackberry is substantially less bulky than a couple of shelves worth of hard-bound legal books. Oh, what will technology give us lawyers next?

In case you’re not yet an iPhone user, you can always search the Delaware Code for free online, made available on the State of Delaware’s website.

Delaware has lots of lawyers. In fact, the lawyer-to-citizen ratio is the third highest state in the country.  But, at the same time, we have a very small bar compared to other states.  It’s a privilege to practice law in Delaware, as any Delaware lawyer will surely tell you.  The limited number of lawyers in our community precludes anonymity for any substantial length of time.  And, when you work with the same people regularly, it is in your best interest to conduct yourself with professionalism and civility at all times. You will be remembered, so it’s better to be remembered for your good manners than for your abrasive style.

August, if you didn’t know, is Win With Civility month.  So it’s as good a time as ever to do a bit of self-analysis.  How would your colleagues and peers describe you if asked?  If the answer to that question is not totally positive, work to make a change starting today. 

If you’re interested, the Harvard Law School Forum on Corporate Governance and Financial Regulation has a detailed article on “The Delaware Way” of practicing law, specifically focusing on our esteemed jurists.  It’s a lengthy but worthwhile read. See Delaware’s Art of Judging.

Delaware's anti-discrimination laws have been amended to include
sexual orientation as a protected class.  

S.B. 121 passed the General Assembly on June 24, 2009, and was signed by Gov. Markell on July 2, 2009.  The law took effect immediately.

Additional Key Information

• Sexual orientation is defined exclusively to mean "heterosexuality, homosexuality, or bisexuality." 

• Religious organizations are exempted from the law.

• The law does not require employers to offer health, welfare, pension, or other benefits to domestic partners to the extent offered to spouses of married employees.

Employee Handbook Update
Handbooks should be updated to reflect the new law.  Manuals now should also prohibit discrimination based on sexual orientation.  Please contact any of the attorneys in our Employment Law Department to learn how this new law may affect other policies in your organization or with any other employment-related questions. 

Delaware has the 17th highest rate of adult obesity in the country, with more than one in four adults classified as obese, according to a new report by the Trust for America’s Health and the Robert Wood Johnson Foundation. Employers bear many of the indirect costs of this obesity rate, including higher disability costs, more sick days, and increased workers’ compensation claims. The report indicated that Delaware’s obesity rate increased significantly in the past three years—a sign that current health and wellness policies aren’t cutting it.

So what can Delaware employers do? The study highlights three steps employers can take to promote healthier lifestyles:

· Provide workplace wellness programs and preventative care benefits

· Give employees a chance to take breaks for exercise during the work-day

· Offer coverage for wellness services such as nutrition counseling and weight management programs

Some companies have already rolled out in-house yoga classes, discounted gym memberships, and free massages for stress reduction. How those perks will weather the economic downturn is an open question. Other options? Employers can offer healthier food choices at company meetings and events, and improve selections at the office cafeteria.

F as in Fat: How Obesity Policies Are Failing in America 2009, was released on July 1, 2009.  For a list of other blogs covering wellness and work-life balance, see our blogroll, including the 50 Best Blogs on Wellness, Women's Interests, and Work-Life Balance

*This guest post is by Summer Associate Christen Martosella. Christen will be entering her second year of law school at NYU in the Fall but, until then, she's busy making a great impression at YCS&T.  Thanks, Christen!

Delaware's hourly wage increase is effective July 24, 2009, and the new hourly wage $7.25/hour.  Additionally, the federal minimum wage is set to increase to $7.25 on July 24, 2009. 22 other states will also increase the minimum wage for employers subject to state wage and hour laws. The majority of these increases take effect on July 24, 2009, but three states (KY, IL, NV) raised their minimum wage effective July 1, 2009.  

Employers-- make sure that starting July 24, 2009, you properly display a copy of Delaware's most current minimum-wage poster in a conspicuous location in your workplace.

Delaware employers should prepare to add another protected characteristic to their list.  Late last night, the Delaware General Assembly passed Senate Bill 121, which would prohibit discrimination based on sexual orientation. It passed the Senate after a three-hour debate. 

The bill is headed to Gov. Jack Markell for signature.  The Delaware News Journal reports that Rep. Pete Schwartkopf (D-14th Dist.), who helped push the bill through the House, has said that Markell is expected to sign.   

The bill had been introduced every year for the past decade without success.  Five of those bills had passed the House but stalled in Senate committees.  We reported on an earlier version of the bill, which passed the House in March but died in the Senate Executive Committee.  A full version of the bill is linked below.

What do Delaware and Colorado employers have in common? If Delaware House Bill 231 is passed, both states will require employers to grant employees leave to attend school-related functions for their children. Unlike Colorado’s law, which applies only to employers with 50 or more employees, Delaware’s law would apply to all employers. In a nutshell, Delaware’s law would grant working parents 16 hours of unpaid leave per year to attend school-related events.

If passed, the law would require that all Delaware employers, regardless of size, permit employees to attend classroom activities, school meetings and extra-curricular school events related to the employee’s child if the meetings or classroom activities cannot be scheduled during non-work hours, up to 16 hours a year, per child. The time off can be taken in increments of up to 4 hours. The only consolation to small employers is that employers with ten or fewer employees working at one location could limit the number of employees who may take leave on any one day.

Any time off taken under the new law would be unpaid (like FMLA leave), but the employee could substitute any “available leave” such as vacation and personal days to be compensated for this time.

The only responsibility of the employee requesting such leave would be to provide at least 48 hours advance notice of the leave and make a reasonable effort to schedule the leave so as not to unduly disrupt the operations of the employer. The employer can request written verification of the event.

Any employer who violates this section shall be subject to a civil penalty between $1,000 and $5,000 per violation.

One interesting question is whether sick leave would be considered “available leave.” “Available leave” is defined in the statute as “annual or vacation leave, personal leave, compensatory leave or other similar leave provided to an employee with pay by an employer.” Unlike the Colorado law, Delaware’s statute does not explicitly identify “sick leave” as leave that could be used for this purpose. One would expect employees who have paid sick leave to attempt to use this leave, prior to other types of accrued leave.

Although the leave is unpaid, it could potentially present a considerable burden on smaller employers. Under the statute, an employer with 11 employees, 5 of whom requested leave to attend the same school-related function, would be required to let them all attend. It makes more sense to limit the statute to larger employers, like the FMLA, and like Colorado did in its similar law.

We’ll keep you posted on the progress of this bill.

Delaware’s employment discrimination law is a step closer towards being amended. On March 26, 2009, a bill was introduced to the Delaware House of Representatives that proposes to add the term “sexual orientation” to the already-existing list of prohibited practices of discrimination in Delaware. If enacted, the legislation would forbid discrimination against a person on the basis of sexual orientation in housing, employment, public works contracting, public accommodations, and insurance. In addition, the proposed legislation provides that Delaware’s Superior Court (its trial court) would, in the first instance, hear and adjudicate alleged criminal violations of equal accommodations, fair housing and employment discrimination.

Employee theft is on the rise.  This is not terribly hard to believe in light of the current economic forecast.  When the economy heads south, crime generally and theft in particular, escalate, so it's no surprise that theft in the workplace follows that trend. 

Jon Hyman, of the Ohio Employer's Law Blog, discusses the increased rate of employee theft in the context of employer's use of lie-detector tests.  (Jeez, can this guy make a connection or what??)   For an outstanding overview on the issue, see Jon's post, A Primer on Employee Polygraph Testing, in which he discusses the ins and outs of the Employee Polygraph Protection Act of 1988. 

Delaware employers should be aware, though, of the state-specific requirements and prohibitions in this area.  The state statute (19 Del. C. Sec. 704), provides that an employer may not, "require, request or suggest. . . or shall cause, directly or indirectly, any employee or prospective employee to take a polygraph, lie detector or similar test or examination as a condition of employment or continuation of employment."  Unlike its federal counterpart, the Delaware Polygraph statute provides no exceptions to the general prohibition against the use of lie-detector tests by employers. 

And, in case you were wondering, yes, there is a state-court decision interpreting the statute.  In Heller v. Dover Warehouse Market, Inc., the Superior Court denied an employer's motion for summary judgment, finding that, whether an employee's consent to take a polygraph could be a valid waiver was an issue of first impression.  Referencing case law from Maryland, Pennsylvania, and the Third Circuit Court of Appeals, the court found that the test to determine the validity of the employee's consent:

depends upon a jury determination of whether the waiver was compelled as a condition of continued employment. Under this test, if the jury finds the plaintiff was required to sign the waiver as a condition of employment, then the waiver is invalid.

This law has been around long enough that most employers operating in the State are cognizant of its prohibitions.  But, in light of the increasing incidences of workplace theft, this is as good a time as any to review it.  The key for Delaware employers is this:  polygraphs and lie-detectors cannot be used for employees--even in the course of a theft investigation.

Delaware's own Joe Biden will appear for an interview on Monday, December 22, 2008, on Delaware Tonight.  According to the Delaware Tonight website, Biden will discuss his thoughts about making history as the first Delawarean to be elected Vice President, and life's biggest adjustments since that memorable election night.

Delaware employers should tune in to keep abreast with this quickly-changing political landscape.

Charges of employment discrimination in Delaware are handled by the Delaware Department of Labor (DDOL). Until now, the charge process has not been regulated by state law. How the DDOL handles a charge of discrimination and how charging parties and responding employers may be involved in the process have been available only as proposed regulations until last month when the DDOL published its first set of final regulations applicable to the charge process.

In a prior post, the new regulations were summarized and explained. In this follow-up post, I offer some of my thoughts on these important recent changes.

Most of the procedures set forth in the new regulations will be familiar to anyone who has been involved with a charge of discrimination filed with the DDOL during the past few years. One of the most useful recent developments, even prior to the issuance of the new regulations, has been an increased emphasis on mediation. In my view, unless the employer is sure that the Administrator will be dismissing the charge, the employer should always attempt mediation because it often results in a quick and (relatively) inexpensive resolution of the dispute. Mediation is simply a meeting between the mediator, the charging party, the employer, and their attorneys, if any. Both sides are given an opportunity to talk about the case in an effort to resolve it without further litigation.

Settlement means the case will end without an admission of liability by the employer and it is the only way to control the outcome of the dispute. Even if mediation is unsuccessful, participating in the process is still helpful because the employer will gain insight into the charging party’s view of the claim. The employer also will be able to determine the facts upon which the charging party intends to rely.

At the very least, the time it takes to schedule and participate in mediation will allow the employer and its attorney to conduct a more thorough investigation of the facts and law and prepare a better answer to the charge than they would be able to do in the 20 days contemplated by the regulations.

Employers may be a bit disconcerted by the regulations’ failure to require the DDOL to give notice to a respondent employer when it issues a subpoena. When the DDOL published its proposed regulations and opened them to comments, employer representatives, including Young Conaway Stargatt & Taylor, requested that the regulations provide for such notice.

We also requested that the employer be permitted to participate in depositions to enable it to have a more complete understanding of the facts that the DDOL gathers. The DDOL rejected this request, presumably because the law that authorizes the DDOL to issue subpoenas and take depositions (Section 108 of Title 19 of the Delaware Code), does not require the DDOL to give notice or any opportunity to participate to employers. Employers who are unhappy about the possibility that the DDOL may engage in unilateral investigatory activities may consider lobbying their legislators to amend the law.

The Delaware Department of Labor (DDOL), is the agency responsible for processing charges of discrimination filed under Delaware’s various discrimination statutes. Because the DDOL has a work-sharing agreement with the U.S. Equal Employment Opportunity Commission (EEOC), the Department has authority to process charges filed under state and federal discrimination laws.

Until now, the charge process, including applicable deadlines and controlling procedures, has not been regulated by state law. How a charge is handled by the DDOL, and the rules governing charging parties and responding employers have been available only in the form of proposed regulations for the past several years. But, last month, the DDOL published its first set of final regulations applicable to the charge process.

In this post, the new regulations are summarized and explained. A second, follow-up post will offer some commentary about these important changes.

The Charge of Discrimination

The regulations set forth what must be included in a charge of discrimination. A charge must identify:

• the basis for the DDOL to assert jurisdiction over the charge;
• the type(s) of discrimination alleged;
• the type(s) of adverse action alleged;
• the facts that support the claim;
• the laws that have allegedly been violated; and
• the reasons that the charging party believes support a finding of discrimination.

For the charge to be valid, the charging party must swear under oath that the allegations are true and correct and must sign the charge before a notary public.

Initial Processing of a Charge

Once a verified charge is filed, the DDOL must send a copy to the employer, by certified mail, within 14 days. The DDOL may also include a request for information with the charge, and, in its discretion, may invite the employer to participate in mediation. Even if the DDOL has not invited the employer to participate in mediation, the regulations permit the employer to request mediation in lieu of filing an answer.

The employer has 20 days to submit an answer, though the Administrator has the discretion to grant an extension of time to respond. The answer must respond “fully and completely” to the allegations asserted in the charge.

Preliminary Findings

The next step is the issuance of a preliminary finding. The Administrator must issue her preliminary finding within 60 days from the date the charge was served to the employer. The DDOL Administrator has three options. She can refer the case to mediation, refer the case for investigation, or recommend dismissal of the case.

The Administrator may dismiss a case in the following circumstances:

• the DDOL does not have jurisdiction over the case (because, for example, the employer has too few employees to be covered by the law or the employment was not located in Delaware);
• the charging party is not cooperating;
• the employer has filed for bankruptcy or relief is otherwise precluded;
• the charge was filed after the statutory deadline, or
• the charge does not allege facts that would, even if true, constitute a violation of the law.

Administrative dismissal is rare. And, even if dismissal is recommended, the charging party will be given the opportunity to provide additional evidence demonstrating that an investigation is warranted.

Mediation

The regulations also address the DDOL mediation process. The Administrator is authorized to refer a case to mediation at any time, after 20 days from service of the charge. The regulations make clear that mediation communications and records are confidential and may not be used against either party. The regulations preclude the mediation director and staff from participating in the investigation of any case that is unsuccessfully mediated. And, if the case is settled, the settlement agreement will be kept confidential unless there is an allegation that one of the parties has breached the agreement.

Investigation

If the parties do not mediate the charge or if the mediation fails, the charge will be referred for investigation. The employer has 20 days from the date it receives notice that the case has been referred for investigation to file its answer, if it has not done so already. If the employer did file an answer, the employer will have 20 days from the date of notice of investigative referral provide a supplemental response or to respond to any pending request for information.

The regulations include a lengthy description of the DDOL’s tools for investigating claims. The DDOL’s powers include obtaining information from the employer through written requests for information and documents, on-site visits and interviews. The DDOL can obtain information from third parties with subpoenas and depositions. The DDOL also has the authority to obtain information at a fact-finding conference.

A DDOL representative advises the parties in advance of the conference to bring specified witnesses and documents. During the fact-finding conference, the DDOL representative will question the witnesses and parties. The regulations state that “the parties shall not be entitled to cross-examine witnesses,” but the representative has the discretion to allow attendees to question the witnesses.

Determination and Findings

When the DDOL concludes its investigation, the Administrator will issue a determination. The determination can state that the Administrator either did or did not find reasonable cause to believe that the employer violated the law by discriminating against the charging party. A “no-cause” finding results in a dismissal of the charge. A finding of “cause,” on the other hand, means that the Administrator has determined that there is reasonable cause to believe that the employer unlawfully discriminated against the charging party.

In the event of a “cause finding,” the employer has 10 days to file a written request for reconsideration of the finding. The Administrator will determine whether the employer will be granted permission to submit additional information in support of its request. The Administrator’s decision will be issued within 10 days of the date the request for reconsideration is made.

Conciliation

If the reasonable-cause finding is not reversed by the Administrator, it is considered final. A final cause finding triggers the conciliation process. Similar to the mediation process, conciliation provides an additional pre-litigation opportunity for the parties to resolve the dispute.

If conciliation fails and the parties do not reach agreement, the DDOL will issue a Right-to-Sue Notice to the employee, which authorizes the employee to file a complaint in state court. At that point, the DDOL’s involvement in the case concludes. The DDOL will retain its file for two years. If litigation ensues, the parties will have the right to obtain copies of the witness statements and factual written data, reports and documents in the DDOL’s file by making a written request and serving a copy of the request on the other party or the other party’s attorney.

Employees who sign noncompete agreements promise not to compete with their then employer for a certain period of time after termination.  This means that the employee cannot compete directly, by soliciting customers of the employer or unfairly, by using information, knowledge, or contacts obtained by the employee during this employment in a way that would harm the employer after the relationship ends.

Litigation of noncompete agreements can be very costly.  At the same time, though, such litigation is often necessary to protect the vital interests of the business.  Another problem with litigating a noncompete agreement is the difficulty in proving the breach.  The former employer may suspect that the employee has taken vital information in violation of his agreement, but this may be very difficult to actually prove. 

Developments in the world of computer forensics is making this difficulty less and less of an issue.  Thanks to this branch of science, employers are able to determine whether certain information has been improperly accessed, copied, or even deleted. 

The courts in Delaware have a long relationship with noncompete agreements.  Delaware, considered by many as a "pro-business" state, has a history of enforcing reasonable noncompetition and nonsolicitation agreements.  The standards for determining enforceability are largely the same as those used by other states' courts with one exception.

In most states, the law requires some form of consideration for the agreement other than continued employment.  In short, in most states, an employer who approaches a current employee and says, "Sign this noncompete agreement or you're fired" will not have any luck enforcing that agreement.  Instead, those states require the employer to offer some additional form of consideration.  This can be satisfied by presenting the noncompete agreement at the time of hire--i.e., we'll give you a job if you give us your promise not to compete when you leave--or by a promotion, raise, or just plain cash.  The logic is sound--an employee who will be offered a promotion to a higher level position with higher level access to sensitive information can be required to promise not to abuse that access.  If an employer doesn't offer "something for something," as the saying goes, the agreement, like any other contract, will not be enforceable by the courts.

Except, that is, in Delaware.  In Delaware, and especially in the Delaware Court of Chancery, one of the few equitable courts in the entire country, there is no need for any "additional" consideration.  In Delaware, the simple promise of continued employment is sufficient.  And by "continued employment," we do not mean an employment contract or a promise to employee the individual for any given period of time.

Instead, because Delaware is an "at-will" state, where an employer can fire an employee at any time for any (lawful) reason, or for no reason at all, the mere fact that the employer promises not to terminate the employee at that minute is enough consideration.  So, if you are an employee in the First State of Delaware, and your Delaware employer comes up to you and says, "Sign here or you're fired," don't assume that the employer is totally off-base.  Although this might be the case in most states, in Delaware, it's just not so. 

Delaware's General Assembly put to rest several bills that would have had substantial negative impact on the State's employers.  The 144th General Assembly concluded on June 30th without having passed several controversial pieces of legislation.  Here are the highlights:

Independent Contractors 

Perhaps the most controversial bill that died on June 30 was House Bill 468. This bill, called the Construction Industry Independent Contractor Act would have imposed substantial penalties on contractors who improperly classify their employees, including fines, terms of imprisonment, and loss of business licenses. A previous blog post discusses this bill in greater detail, see Construction-Industry Employers Should Be Aware of Proposed Legislation

 

Sexual-Orientation Discrimination

A bill prohibiting discrimination based on sexual orientation in employment as well as housing, public works contracting, public accommodations, and insurance and grants was shot down again. Senate Bill 144 was the just latest attempt to expand the anti-discrimination laws to include sexual orientation.   Although this bill was defeated, it is sure to be resurrected in the next General Assembly, just as it has for the last nine years.

 

Elimination of Employment At-Will

Another perennial loser, a bill eliminating the employment at-will doctrine, was again sent to its grave. House Bill 327 never got out of committee.

 

Minimum Wage Bills

Finally, two bills that would have increased the minimum wage expired on June 30. Senate Bill 204 would have increased the minimum wage from $7.15 per hour to $7.75 per hour effective March 1, 2009, and from $7.75 per hour to $8.25 per hour effective March 1, 2010. If passed, Delaware's minimum wage would have been the highest in the nation.

And, Senate Bill 280  would have increased the minimum wage for "tipped" employees on January 1 of each year through 2012.  The rate would have increased from the current $2.23 per hour to $2.51 per hour on January 1, 2009; to $2.86 per hour on January 1, 2010; to $3.32 per hour on January 1, 2011; and to$3.57 per hour on January 1, 2012.  The minimum wage for “tipped” employees has been $2.23 per hour since 1987.

Delaware Governor Ruth Ann Minner's recent judicial nomination triggered an avalanche of employment-law issues.  The man she'd nominated as a Delaware Family Court Commissioner was convicted of selling cocaine to an undercover officer when he was 17 years old. Since then, he'd led an honorable life, going to college, then law school, and, most recently, holding the position of deputy counsel to the Governor. But the state legislators raised questions about whether his criminal record prevented him from sitting on the bench.

The Governor asked the Delaware Supreme Court to issue an opinion answering this question.  The current law states that persons cannot hold state office if convicted of an "infamous crime."  The term has never been defined. 

The state Supreme Court held that the offense, which was committed as a juvenile, should be treated as a "civil delinquency, not [a] crime at all," and certainly not as an "infamous crime."

The juvenile conviction was pardoned in 1999 shortly before he was admitted to practice law in Delaware and New Jersey.  Since then, he has worked as a deputy attorney general and a defender prior to working as legal counsel for the Governor.   His community contributions include being a member of the Metropolitan Wilmington Urban League, and serving in positions on the Delaware Law Related Education Center and the Delaware State Bar Association's Committee on Professional Ethics.

This story serves as an excellent example of the seriousness with which employers should consider an applicant's criminal history.  Employers who do conduct background checks that include criminal records should not presume that a conviction is an automatic bar to employment.  In accordance with EEOC Guidelines, the candidate should be given a full and fair opportunity to explain the conditions of the crime and conviction, as well as how he or she has contributed to the community and society at large as factors for employment. 

See full coverage of this story by Esteban Parra at the Wilmington News Journal's website.

Another important source of information is the EEOC's Fact Sheet on Employment Tests and Screening, which addresses Criminal Background Checks.

Delaware employers who've not heard of "The Construction Industry Independent Contractor Act" should pay close attention to this post.  Every business with employees working in Delaware should be aware of this bill, HB 468, introduced yesterday in the Delaware General Assembly, and the many repercussions it could cause. 

Proposed Bill Would Target Delaware Employers in the Construction Industry

 

"The Construction Industry Independent Contractors Act,” apparently is on the fast track for approval at the state legislative level.  Although its name indicates that it reaches construction-industry employers, the proposed bill has potential implications for all employers.

In short, the bill purports to penalize employers who improperly classify construction employees as independent contractors.

In essence, it provides that all construction industry workers are “deemed to be” employees unless:

1. the workers are “free from control or direction;”
2. the work is “outside” the employer’s usual business; and
3. the person is “customarily engaged in an independently established trade, occupation, profession, or business."

 

Employers Could Face Jail Time for Misclassification

 

An employer who fails to “properly classify” a person as an employee, even unwittingly, is subject to fines and imprisonment for up to 90 days. If done knowingly, the fine can be as much as $10,000 and the prison term as much as 6 months. In addition, the Secretary of Labor can impose administrative penalties, debar the employer from state projects, and even require the employer to cease operations.  And as if those measures aren't enough, an individual who claims to be the victim of misclassification, or his or her union, can bring a civil action for damages, including a class action.

This draconian legislation, if enacted, would expose construction industry employers to financial ruin. Class action lawsuits are invited, and the language is constructed in such a way that virtually every person who works on a construction project would be viewed as an employee.

 

The Potential Consequences of the Independent Contractors Act

 

But why stop with construction employers? The same rationale would seem to be applicable generally to employers, so the next step would seem to be to expand the scope of the legislation to cover all employers. Interested businesses and business associations beware – this bill must be stopped!

The full text of the bill can be seen at the Delaware General Assembly website.

Wilmington City Council has passed legislation clarifying and updating Wilmington’s Earned Income Tax code, commonly referred to as the City’s "wage tax." This is the first major amendment to the Earned Income Tax code in almost 40 years.

The new amendments include:

• taxpayer protest procedures;
• jeopardy assessments (the right of the City to demand immediate payment if collection of a tax would be jeopardized by a delay);
• accuracy related penalties (authorizing the City to assess a 25% penalty for substantial underpayment or underreporting of tax); and
• safe harbor provisions for armed forces personnel actively serving in military combat zones.

Wilmington, the cultural and financial hub of Delaware's New Castle County, has made collection of the wage tax a priority in recent years. Since January of 2006, the City has performed over 3,000 wage tax audits and collected more than $5.5 million in unpaid wage tax. According to City Finance Director Ron Morris, Wilmington expects to conduct approximately 12,000 tax audits over the next few years and add $2.1 million in new revenue in Fiscal Year 09 alone.

The wage tax is currently set at 1.25%.

Any person who works in the City of Wilmington or conducts business in the City from which he derives wages or business income, is subject to the City’s Earned Income Tax, regardless of whether he lives inside the City.

In addition, all residents of the City of Wilmington are subject to the wage tax. City residents must pay the tax on all earned income (whether derived from wages or business income) regardless of where residents work.

More information about the wage tax is available online at www.WilmingtonDE.gov. or by calling the City of Wilmington Finance Department, Earned Income Division, (302) 576-2418.