Alabama Employment Law Report : Alabama Employment Lawyer & Attorney : Daniel J. Burnick : Sirote & Permutt Law Firm

On Monday, October 24, Jefferson County Presiding Judge Scott Vowell entered an order declaring that Section 27(a) of the Immigration Act unconstitutional.  This section provides that "No court of this state shall enforce the terms of, or otherwise regard as valid, any contract between a party and an alien unlawfully present in the United States, if the party had direct or constructive knowledge that the alien was unlawfully present in the Untied States at the time the contract was entered into...."  Judge Vowell referenced Section 95 of the Alabama Constitution, which provides that "There can be no law of this state impairing the obligations of contracts by destroying or impairing the remedy for their enforcement....After suit has been commenced on any cause of action the legislature shall have no power to take away such cause of action, or destroy any existing defense to such suit."  Judge Vowell found that since the lawsuit was commenced before HB 56 was passed and signed into law, Section 27(a) would not apply to the pending action.  Judge Vowell went on to state that "The Court declares that Section 27(a) of the Act violates the Alabama Constitution of 1901, to the extent the Legislature has attempted to take away an existing cause of action in a pending lawsuit."  As such, this ruling ONLY APPLIES to lawsuits filed before HB 56 became effective.  Also, this ruling is technically only binding on actions pending in Jefferson County, although other counties may rely on Judge Vowell's opinion.

Practice pointers.  The ruling declaring Section 27(a) unconstitutional only applies to cases filed before the HB 56 became effective.  After Judge Vowell overruled that Defendant's Motion to Dismiss, the parties settled the case, so an appeal of this order is very unlikely.  I anticipate that other courts may examine the constitutionality of Section 27(a) in cases filed after the effective date of HB 56.  The Federal Courts did not enjoin the enforcement of Section 27(a) in the federal litigation. Also, remember that a lawsuit challenging the constitutionality of HB 56 is still pending in State Court in Montgomery, and that judge has not yet ruled. 

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Since we have all been overloaded with immigration issues, I will be looking at 3 separate issues in this post.  First,  the Georgia Supreme Court adopted an opinion issued by the Georgia Bar Standing Committee on the Unlicensed Practice of Law (UPL) finding that responding to a garnishment by a corporation is a legal proceeding, and corporations must be represented by counsel in doing so.  Employers in Georgia have 30 days to serve and file an answer to a garnishment, and must respond every 30 days during the life of a continuing garnishment.  If a response is not timely filed, the employer may be found in default and may be liable for the entire debt of the employee.  In Georgia, as in Alabama, a corporation cannot represent itself in a judicial proceeding.  Georgia has an exception for cases involving claims of less than $15,000, which are filed in Magistrate Court, where any full time officer or employee of a corporation may represent the corporation. 

Practice pointer.  Using an attorney to respond to garnishments in Georgia will result in additional costs to corporations.  However, not using an attorney may result in civil and/or criminal charges for the unauthorized practice of law, and may result in a default being entered against the corporation for the entire amount of the employee's debt.

Effective January 1, 2012, the minimum wage in Florida will increase from $7.31 per hour to $7.67 per hour.  This increase is the result of 2004 constitutional amendment that requires a new wage calculation every year on September 30, based on the Consumer Price Index.

Practice pointer.  Effective January 1, it will cost more to pay employees in Florida, and I expect that there will be a roll-up, although slight, for workers who are making more than minimum wage as new employees are hired.

The IRS recently announced that is is offering a new "Voluntary Classification Settlement Program" (VCSP) allowing employers who agree to reclassify their improperly classified "independent contractors" as "employees" in exchange for paying significantly reduce penalties.  Aimed at small employers, but open to all, the VCSP allows employers to treat their misclassified independent contractors as employees going forward and the IRS will assess employment taxes, at a reduced rate, only for the tax year before the agreement was entered into, with no penalties, interest or audits.  There are some hidden pitfalls that employers must be aware of.  First, the IRS has entered into a Memorandum of Understanding with the Department of Labor concerning referrals and sharing of information in worker classification cases.  The DOL, or the employee, may come in seeking back benefits and wage and hour benefits (either minimum wage and/or overtime) against the employer.  This is after the employer admits to the IRS that it has misclassified it's employees as independent contractors.  The Office of Federal Contract Compliance Programs and the Occupational Safety and Health Administration will also be receiving and sharing this information.  There may also be potential ERISA violations, unemployment compensation issues, workers' compensation insurance issues and other hidden landmines for employers.

Practice pointer.  As I have written before, it is important for workers to be properly classified, either as employees or independent contractors.  Whether or not an employer decides to take part in the VCSP program, workers need to be properly classified.  The IRS's VCSP sounds good, but there are dangers involved in participating in it.  Before doing so, it would be wise to consult with legal counsel and/or an accountant. 

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On Friday, October 14, the 11th Circuit Court of Appeals entered an order enjoining the enforcement of two more sections of Alabama's new immigration law.  The Court enjoined the enforcement of Section 10, which states  "(a)  In addition to any violation of federal law, a person is guilty of willful failure to complete or carry an alien registration document if the person is in violation of 18 USC Section 1304(e) or 8 USC Section 1306(a), and the person is an alien unlawfully present in the United States." 

The Court also enjoined the enforcement of Section 28 which addresses elementary and secondary school students and requires schools to determine at enrollment whether the student was born outside the US or is the child of an alien not lawfully present in the US, and qualifies for assignment to an English as Second Language class or other remedial program.  If upon review of the student's birth certificate, it is determined that the student was born outside the US or is the child of an alien not lawfully present in the US, the parent, guardian or legal custodian shall notify the school of the student's citizenship or immigration status.  Each school district is required to collect and compile this data and submit it to the State Board of Education as an annual report.  HB 56 PROHIBITS the public disclosure of any information which personally identifies any student,with some limited exceptions.  The student will not be prohibited from attending school if he/she is not legally in the country.

The following provisions were enjoined by Judge Blackburn:  8, 10(e), 11(a), 13, 16 and17, and the 11th Circuit did not lift the injunction as to these provisions.

Practice pointer.  As the Court pointed out in the opinion, this decision does not bind the merits panel, which will review the case after full briefing and oral argument. 

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Alabama Department of Public Health delays licensing process.

Recently, the Alabama Department of Public Health sent letters to all businesses it regulates advising them that the renewal of licenses for 2012 and the processing of new licenses has been impacted by the new Immigration Law. The ADPH is taking the position that the license is a public benefit, and thus covered by the law.  ADPH believes that it will take 2-4 weeks to determine what needs to be done to comply with the law to show that individual owners of regulated businesses are citizens or legally present in Alabama.  With a calendar year renewal process, it is likely that there will be delays in issuing 2012 licenses.  A similar situation occurred for 2011 licenses, when the licenses were required to be printed on a new type of paper, and many licenses were not issued until March, 2011.  Among those businesses impacted by the ADPH are abortion clinics, hospitals, ambulatory care centers, end stage renal disease facilities, hospice, home health care, rehabilitation centers, sleep disorder clinics and restaurants. 

Practice pointer.  I anticipate that the licensing process will be delayed into 2012, and regulated businesses will need to continue operating with licenses that technically expire in 2011.  Also, those regulated by the ADPH will need to comply with whatever new forms and documents are adopted.  Finally, ADPH, already short staffed, will incur additional time and expense in complying with the law.  We have already seen the impact on drivers licenses.  Be on the lookout for other state agencies that will be implementing new requirements for licenses, such as building trade licenses (plumbing, electrical, HVAC, etc), Department of Mental Health, Medical Board, Nursing Board, etc.

First Immigration Convictions Reported

Al.com is reporting that 4 individuals were arrested following 2 traffic stops in Decatur late Sunday/early Monday.  The 4 pleaded guilty to misdemeanor charges of not having proper documentation.  They were sentenced to a 30 day suspended jail term and fined $300 plus court costs.  They are being held in custody pending a decision by federal immigration authorities as to whether they will be deported or not. 

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Immigration

     On Wednesday, October 5, Judge Blackburn denied requests made by the Department of Justice and a coalition of civil rights groups to delay implementation of HB 56 while on appeal.  Last week, Judge Blackburn upheld the vast majority of HB 56, while enjoining several provisions of the law.  The groups will be appealing to the 11th Circuit Court of Appeals, and have stated that they may seek a stay from the 11th Circuit to prevent the law from staying in effect pending the appeal.  I will post updates as they occur.

     In the meantime, there are numerous reports of students leaving schools throughout the state, workers leaving their jobs and several arrests have been made pursuant to HB 56.  Interestingly, the first arrests reported arose from a drug bust, and those arrested were from Yemen, and were not Hispanic.

NLRB

     I have previously reported that the NLRB was going to require the posting of Notification of Employee Rights effective November 14, 2011.  Because there appears to be much confusion over what businesses were covered by this requirement, the NLRB has delayed implementation of the posting until January 31, 2012.  At least 3 lawsuits have been filed seeking to prevent the NLRB from requiring this posting. 

Social Media and the NLRB

     The NLRB has been active in reviewing terminations or other disciplinary action as the result of social media posting.  I reported in February that the NLRB had contested the termination of an employee at an ambulance company.  Another social media firing case involved a BMW dealership in Chicago, where an employee posted negative comments about one of the dealership's events, when they planned to bring a hot dog cart to provide food to customers.  The salesman complained that the dealership should provide better food for it's customers.  This same salesman also took pictures of an accident that occurred when a customer was test driving a BMW and hit the accelerator instead of the brake pedal, and crashed.  These photos were posted at the same time he posted pictures of the hot dog cart.  The dealership learned of the postings the next day, and terminated the salesman.  The NLRB claimed that the posts were protected concerted activity since part of the salesman's compensation was customer satisfaction, and the postings about the hot dog cart concerned his compensation.  The NLRB administrative judge ruled that the posting about the hot dog cart was protected, but found that the posting about the accident was not, and that the dealership terminated is employment based on the accident related posting. 

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