Non Profit Report - September 2014

Date: September 25, 2014

Is Your Sick Leave Policy in Compliance With District of Columbia Law
By: Tiffany M. Releford, Esq.

In November 2008, the District of Columbia enacted the Accrued Sick and Safe Leave Act of 2008 (“ASSLA”) which requires employers to provide paid sick leave to employees, as well as safe leave for absences related to domestic violence or sexual abuse. Effective March 2014, ASSLA was amended by the Earned Sick and Safe Leave Amendment Act of 2013 which broadens the employees covered under ASSLA, provides for additional recordkeeping, and includes stronger remedies for violations of the law.

What is required under ASSLA? Prior to the amendment to ASSLA, employers had to provide paid sick leave to eligible employees for absences related to physical or mental illness, preventative medical care, caring for a family member, domestic violence, sexual abuse, or stalking. Previously, the term “employee” was defined as an individual who has been employed by the same employer for at least one year without a break in service and who has worked at least 1,000 hours of service with such employer during the previous 12-month period. However, the amendment to ASSLA has re-defined employee to be any individual, whether part-time or full-time, and eliminated the requirement for any length of time of employment. In addition, temporary employees, even if hired through a staffing agency, are now defined as employees under ASSLA. This is significant as many employers’ sick leave policies generally do not apply to part-time employees; however, the amendment to the ASSLA now means that employers must provide part-time employees with paid sick and safe leave. This means an employer must allow all employees to accrue sick leave on their first day of employment; however, the employer may prohibit the employee from using the leave until after the first 90 days of employment.

How are sick and safe leave determined? The amendment did not change the method of determining the sick and safe leave to be provided to employees. The amount of sick leave to be provided is still determined by the number of employees. An employer with 100 or more employees in D.C. shall provide each employee not less than one hour of paid leave for each 37 hours worked, not to exceed seven days of paid leave per calendar year. An employer with 25 to 90 employees in D.C. must provide each employee with not less than one hour paid leave for every 43 hours worked, not to exceed five days of paid leave per calendar year. Lastly, an employer with 24 or fewer employees in D.C. shall provide not less than one hour of paid leave for every 87 hours worked, not to exceed three days of paid leave per calendar year.

Can employees carry over unused leave accrued under ASSLA? Previously under ASSLA, an employee could carry over unused paid leave accrued in one calendar year, so long as the employee did not use more paid leave in one year than the maximum amount of sick leave the employee accrued in a year under ASSLA, unless the employer had a policy that provided otherwise. However, these requirements have now been deleted from the law. Therefore, employees no longer have an annual cap on use of sick and safe leave. This means employers with “use it or lose it” sick and safe leave policies cannot apply those policies since the language of the statute no longer restricts sick and safe leave. However, although an employer cannot cap the leave, an employer is not required to pay employees for accrued but unused sick and safe leave upon termination.

What is required of employers and employees under ASSLA? An employer is still required to post notices regarding ASSLA in conspicuous places. In addition, the amendments did not change the notice employees are required to give before taking sick or safe leave. An employee is expected to give at least ten days written notice of the employee’s intent to use sick or safe leave. In the event ten days’ notice cannot be given, employees should make an oral request for leave prior to the start of the employee’s work day or, in the case of an emergency, prior to the start of the employee’s next work day or within 24 hours of the onset of the emergency. Despite when notice is provided by the employee, the employer may request “reasonable certification” for paid leave absences of three or more consecutive days. Such certification may include a signed document from a health care provider affirming the illness, or a police report or court order indicating the employee or the employee’s family member was a victim of stalking, domestic violence, or sexual abuse.

What if an employer already has a leave policy in place? While ASSLA applies to all employers, an employer that already has a paid leave policy or universal leave policy in place which allows the accrual and usage of leave equivalent to the paid leave described in ASSLA is not required to modify their policy.

Are there any penalties for violation of ASSLA? Under the amendment, an employee now has a private cause of action or administrative action for violation of ASSLA. There is a three-year statute of limitations for civil complainants but the limitations period is tolled if an employee files an administrative complaint within 60 days of the incident or during any period the employer failed to post the required notice. Moreover, the civil penalties for violations of ASSLA were broadened by the amendment. Also, employers are required to maintain documentation of hours worked by employees and paid leave taken for a period of three years. Failure to do so creates a rebuttable presumption that the employer has violated ASSLA.

Accordingly, all D.C. employers should check their policies to make sure they are in compliance with the amendment to ASSLA and, if necessary, seek advice of legal counsel.

Federal Trade Commission Cracking Down on Professional Associations that Inhibit Competition
By: David L. Cahn, Esq.

Take-away: While it is tempting for a professional association to tell its members not to “poach” each others’ customers, doing so violates federal antitrust law.

The National Association of Residential Property Managers, Inc. (NARPM) and the National Association of Teachers of Singing, Inc. (NATS) have agreed to eliminate provisions in their respective codes of ethics that limit competition among their members, according to a Federal Trade Commission (FTC) press release dated August 22, 2014. These settlements are the latest FTC enforcement actions challenging restraints on competition that are incorporated into the ethics codes of professional associations. The consent agreements were unanimously approved by the FTC’s five Commissioners. Each violation of an FTC Consent Order may result in a civil penalty of up to $16,000 per day.

The FTC’s complaint against NARPM, which represents more than 4,000 real estate managers, brokers, and agents, alleges that NARPM and its members restrained competition in violation of the FTC Act through provisions in its code of ethics that restrict comparative advertising and solicitation of competitor’s clients. The provisions read, “The Property Manager shall not knowingly solicit competitors’ clients,” and “NARPM Professional Members shall refrain from criticizing other property managers or their business practices.”

The consent order settling the FTC’s charges requires NARPM to stop restraining its members from soliciting property management work, and from making statements that are not false or deceptive about a competitor’s products, services, or business or commercial practices. However, NARPM is allowed to adopt and enforce “reasonable principles, rules, guidelines, or policies governing the conduct of its Members with respect to representations that its Board reasonably believes would be false or deceptive” if made to its members’ prospective clients.

In a separate complaint, the FTC charged that NATS, which represents more than 7,300 vocal arts teachers in the United States, restrained competition in violation of the FTC Act through a code of ethics provision that prohibits members from soliciting students from other members. The provision reads, “members will not, either by inducements, innuendos, or other acts, proselytize students of other teachers.”

The consent order settling the FTC’s complaint against NATS requires that it stop restraining members from seeking teaching work, and stop telling its members that soliciting students is unethical. Among other things, the order also requires NATS to obtain a certification from each of its chapters that the chapter is not restricting solicitation, advertising, or price-related competition by its members, and to sever its ties with any chapter that NATS learns is restraining solicitation, advertising, or price-related competition by its members.

NATS is allowed to enforce and maintain affiliate relationships with chapters that enforce rules to prevent false and deceptive practices, or that govern “the conduct of judges during singing competitions sponsored or held by NATS or any Chapter.” In other words, judges can be restrained from seeking to “poach” other members’ competing students at the competition; however, otherwise neither NATS nor any of its Chapters can be involved in restricting honest competition among members.

Among other restrictions, both trade associations must implement an antitrust compliance program. What that means is that the association must:

A. Appoint and retain an Antitrust Compliance Officer to supervise its compliance with antitrust laws. For the first three years, the Antitrust Compliance Officer shall be the President Elect of the association, after which the Antitrust Compliance Officer may be the association’s attorney, a member of the Board of Directors, or an executive employee. This obligation continues for 20 years.

B. For a period of five years, provide in-person annual training to its board of directors, officers, and employees concerning the association’s obligations under the FTC Consent Order and an overview of the Antitrust Laws as they apply to the association’s activities, behavior, and conduct.

C. No later than 60 days after the date the Order is issued, implement policies and procedures to:

  1. Enable persons (including, but not limited to, its board of directors, officers, employees, Members, and agents) to ask questions about, and report violations of, this Order and the Antitrust Laws, confidentially and without fear of retaliation of any kind; and
  2. Discipline its board of directors, officers, employees, Members, and agents for failure to comply fully with this Order.

D. For a period of five years, conduct a presentation at (1) each of its annual convention and regional conferences, and (2) each code of ethics training session, that summarizes the association’s obligations under the Order and provides context-appropriate guidance on compliance with the Antitrust Laws.

Conclusion: For a professional association, both its written “codes of ethics” or “codes of conduct” and its actions toward members or chapter affiliates matter, in terms of complying with antitrust law. Association executives and board members should scrutinize their member-facing documents to eliminate provisions that restrain competition, and in particular situations should consult with antitrust counsel to avoid practices that may attract the wrath of the FTC.