Prevailing Wage2017The Massachusetts Prevailing Wage Law (“Prevailing Wage Law”) for public works projects establishes the minimum wage rates that must be paid to laborers on various public projects. Public construction projects can include, among other things, additions and alterations to public buildings and demolition tasks.

Generally, the Prevailing Wage Law applies to all public agencies, such as cities, towns, and counties. For purposes of the Prevailing Wage Law, the public agency requiring assistance with a public works project is often referred to as the “awarding authority.” Whether you are a general contractor, subcontractor, or employee performing services related to a public construction project, it is important to understand some basic information about the Prevailing Wage Law and how it may affect you.

Before an awarding authority seeks bids for a public construction project, the awarding authority must obtain a schedule of the prevailing wage rate for the project from the Department of Labor Standards (“DLS”), i.e., the minimum wage rate that must be paid to workers on the project. The DLS must then provide a copy of the prevailing wage schedule to the contractors from whom bids are sought. If the project does not require bids, then the awarding authority must provide a copy of the prevailing wage rate sheet to the potential contractor(s), which will become part of the contract for that project. This allows contractors to factor the prevailing wage rate for the project into their respective bids, e.g., because the prevailing wage rate for a project may be higher than a contractor’s employees’ normal rate(s).

Once a contractor is awarded a public works project, then the contractor should take steps necessary to ensure compliance with the Prevailing Wage Law including, but not limited to, making sure that employees are paid the proper wages. Importantly, the Prevailing Wage Act covers the employees of general contractors and subcontractors, regardless of whether such employees are unionized or non-unionized.

The contractor is also required to post the prevailing wage schedule in a visible location at the jobsite for the duration of the project. This allows covered employees to understand how much they should be paid for that project. In addition to making sure that all covered laborers are paid the proper prevailing wage rate, a contractor should ensure that all eligible employees are paid overtime for hours worked over 40 in a workweek.

In addition, contractors should be aware about various limitations to the deductions that they can take from an employee’s hourly rate on such projects. An employer’s payments to health and welfare, pension, and certain unemployment benefit plans pursuant to a collective bargaining agreement, for example, are supposed to be included in the prevailing wage rate and thus cannot be deducted by an employer to lower the prevailing wage rate. Generally, only an employer’s contributions to a bonafide health and welfare, pension, or supplemental unemployment plan, may be deducted from the wage rate so as to lower the prevailing wage law and remain compliant with the Prevailing Wage Law.

Contractors are also required to submit weekly payroll report forms and required statements of compliance to the awarding authority. Importantly, failure to comply with the Prevailing Wage Law may result in civil or criminal penalties and/or sanctions under Massachusetts law. For specific questions about whether and how the Prevailing Wage Law applies to your situation, please consider contacting an attorney at the Harbor Law Group to discuss your case.

Salary Exempt Aug2016On May 18, 2016 the Department of Labor updated the salary requirements for the executive, administrative, and professional overtime exemptions under the Fair Labor Standards Act (“FLSA”). The new rule, which goes into effect on December 1, 2016, raises the administrative exemption from $455 per week to $913 per week. Thus for executive, administrative, or professional employees to properly be classified as exempt from overtime, they need to be earning a minimum of $913 each week (which amounts to about $47,476 per year). In addition to this increase, the Department of Labor’s new rule also establishes a mechanism to automatically update the salary and compensation levels every three years. This new rule is set to impact approximately 4.2 million workers in the United States who are currently considered exempt from overtime pay.

In light of its anticipated impact, how should businesses prepare for the implementation of the new rule? As a starting point, employers have until December 1, 2016 to become compliant with the new overtime law. Employers have several options available to them. Employers can choose to pay its executive, professional, or administrative employees on an hourly basis and pay time-and-a-half for the hours worked over 40. Alternatively, employers can raise salaries above the new $913 threshold. As another option, instead of raising the salary or paying overtime, employers can limit hours worked to 40 hours each week. As a practical point, employers who choose not to raise the salaries of their workers should strongly consider having employees account for the hours worked each week.

It is important for employers and businesses to be aware that other than raising the minimum salary amount required for exemption from overtime, the Department of Labor’s new rule does not alter the tests to determine if employees are properly classified as exempt from overtime. Not every employee who is compensated at least $913 per week is exempt from overtime. Employers should be careful to review the job descriptions and duties for their salaried workers to make sure that in addition to meeting the new salary threshold, they satisfy the tests for overtime exemption under the FLSA.

Employers in Massachusetts should be aware that if employees are improperly classified as exempt and/or are not compensated for overtime, they may be subjected to treble damages under the Massachusetts wage and hour laws.

Talk ThiefAug 2016In my practice, I counsel small and midsize business clients, many of which are astute with regard to securing their intellectual property rights. They have federally registered their trademarks with the U.S. Patent and Trademark Office, secured a portfolio of patents both domestically and internationally, and registered their copyrights with the U.S. Copyright Office.

However, when they discover an infringement of their intellectual property rights, they are somewhat at a loss about how to protect themselves. They often are concerned that enforcing their rights would be financially detrimental to their businesses. I therefore work with my clients not only on a legal strategy, but sometimes, and more importantly, on an economic strategy for protecting and enforcing their rights in a cost-effective manner.

First, we look at the harm to the business that the infringer is causing. Oftentimes clients may not like that a business with a similar trademark is in its marketplace or that a competitor has come out with a similar product. However, if they are not losing sales (current or projected), suffering product price erosion, or experiencing a loss of goodwill, it likely does not make much sense to bring a lawsuit against the infringer. Instead, other less costly mechanisms should be explored to bring the client’s rights to the attention of the infringer and work out an amicable resolution.

If the business is being harmed, we need to quantify the damages directly attributable to the harm. The enforcement strategy will be driven in large part by the amount of damages that have been incurred and/or can be recovered. If a client’s damages are less than $100,000.00, it usually is not prudent to spend an equivalent amount in attorneys’ fees to stop the infringement. Ideally, a client recovers more in damages than it spends in fees and derives a significant benefit in driving the infringer out of the marketplace.

Next, we evaluate all options. Often it makes sense to first have the business owner contact the infringer directly to see if the two might be able to reach a business resolution without attorneys. It is usually simpler for the CEOs to arrive at a solution without getting their attorneys involved. If this option is not available, the intellectual property owner’s attorney could send a “cease and desist” letter to the infringer. In some trademark and copyright cases, the infringers are unaware of their infringement. Sometimes sending a firm and informative letter (rather than a threatening letter) gets the attention of the infringer and a favorable response. The infringer may only need counsel from an intellectual property attorney to understand that what it is doing violates the law and to prompt a product redesign or rebranding.

For some large companies that are infringing upon a smaller company’s patent rights, it may require filing a lawsuit to garner the infringer’s attention. Once the suit is filed, a courtesy copy of the complaint along with a letter inviting the infringer to discuss settlement options can be sent to see if the parties might reach an amicable resolution short of engaging in the litigation process.

If the less expensive dispute resolution mechanisms discussed above are unavailable and/or ineffective, a client may find itself in litigation to enforce its business’ rights. Intellectual property litigation is a tool available to the small and midsize business. The client just needs to be cost conscious and savvy with regard to how it spends its litigation dollars. Here are some best practices I employ for clients on a tight budget:

  1. Understand the Process: Prepare a detailed budget for clients prior to initiating their lawsuit to minimize surprises. Have clients pay set monthly fees toward the budget to help normalize the litigation fees.
  2. More is More: Draft detailed litigation initiation documents, such as federal court complaints, with strong jurisdiction and venue facts to discourage early motion challenges.
  3. Your Client is the Expert: Let clients take the first pass at creating infringement charts, drafting requests for production, answering interrogatories, etc. Clients are usually the experts on their intellectual property and industries. The more work they can shoulder, the less legal fees they incur.
  4. Designate a Single Point of Contact: Have the client appoint an individual within its organization that is responsible to assist with the litigation efforts. Litigation counsel can then confer directly with one person who can organize document collection, locate the proper witnesses for depositions, draft interrogatory responses, etc. A single point of contact within the client’s organization will save litigation counsel a significant amount of time tracking down the proper individuals and information during the discovery process.
  5. Stay on Point: Focus the litigation process on the tasks that are most important to get to trial. Figure out early exactly what is needed to try the case, and limit the discovery requests and depositions to just the essentials.
  6. Motions Cost Money: The more consensus that can be reached with the infringer, the less costs both parties incur. Try to avoid discovery motion practice and instead reach agreement on the scope and timeline for the production of relevant materials. Consider stipulating to claim construction if both sides are amenable to avoiding the costs of Markman briefing.
  7. Consider Settlement Early and Often: Parties in litigation should always keep the communication lines open with regard to settlement. While costs increase as a litigation progresses, issues often narrow. Discovery supports or forecloses various claims and defenses. Prior art may surface which causes a patent owner to reevaluate the scope of its rights. Claim construction may make or break an infringement position. Settlement positions are fluid and negotiations should be ongoing.

If you have concerns about enforcing your intellectual property rights, contact an intellectual property litigation attorney. You may want to interview a number of attorneys to make sure that they are proposing a strategy that is economically feasible as well as legally sound. Clients should understand their options, the litigation process, and likely outcomes before deciding upon a course of action. The enforcement of intellectual property rights is a common issue encountered by businesses and can be handled in a cost-effective manner.
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