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Welcome to Brown Rudnick’s blog page.  Below you will find our Emerging Technologies and Government Contracts blogs.  To read our Real Estate blog, Get Real! Keeping Real Estate Professionals Ahead, please visit www.getrealestatelawblog.com.

The views expressed herein are solely the views of the author(s) and do not represent the views of parties represented by the blogger(s) or the views of Brown Rudnick LLP or parties it represents.

Mobile App Privacy: Five Things Businesses Can Do To Stay Out Of Trouble

Posted on Friday, Dec 21, 2012

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The business case for offering a mobile app can be compelling: an app can give a business a constant presence on its customers’ mobile desktop, building brand awareness and allowing easy and direct interaction.  But businesses that roll out apps need to pay attention to privacy rules, too, as the recent enforcement action by California’s Attorney General reminds us.

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A New Wave Of GPL Enforcement? Samba and Linux kernel copyrightholders join the fight

Posted on Friday, Jun 29, 2012

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Talk about unintended consequences: Rob Landley, a lead developer of BusyBox, announced that he was rewriting that program solely to disarm GPL enforcers. In response, several other copyright holders came forward to hand the enforcers some bigger and more effective weapons.

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Labor Department Makes Stealth Changes to Service Contract Act Regulations

Posted on Wednesday, May 18, 2016

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We are guessing that you did not hear this morning that the U.S. Department of Labor has published final regulations widening coverage of the Service Contract Act, the law that requires workers on federal service contracts to receive prevailing wages, health and welfare benefits, and paid holidays and vacations.

More correctly, you probably did hear about the regulations themselves, since they were covered in The New York Times and on National Public Radio. But, none of the reports we heard mentioned government contractors or the Service Contract Act.

Okay, let’s explain.

A law called the Fair Labor Standards Act requires employers to pay the federal minimum wage to all non-exempt workers. And, if those non-exempt workers work more than 40 hours in a workweek, they must be paid time-and-a-half for those extra hours. Exempt employees, on the other hand, are not entitled to overtime pay.

For the most part, the Labor Department gets to define who is exempt or non-exempt. Typically, an exempt workers is one who meets the duties test for the Executive, Administrative or Professional exemption and also is paid on a salary basis. Since August 2004, the minimum salary that such an employee had to earn to be exempt was $455 per week, which equates to $23,660 per year for a full-time worker.

This morning, DOL announced that the minimum salary that an employee will have to earn to be exempt will increase on December 1, 2016 to $913 per week, which equates to $47,476 per year for a full-time worker. That’s a little more than double the current amount. Anyone who earns less than $913 per week will no longer qualify for the Executive, Administrative or Professional exemption come December. If they work more than 40 hours in a week, they will be entitled to overtime pay. DOL estimates that 5 million workers will be affected. Of course, through better scheduling of workers, improving timekeeping, tighter supervision of hours worked, giving pay raises to those close to the new salary threshold, hiring more workers and working the existing workforce no more than 40 hours per week, employers can avoid new overtime costs.

Now, back to the Service Contract Act.

Executive, Administrative and Professional employees who are exempt from the FLSA also are exempt from the SCA. Such employees do not have to receive prevailing wages, health and welfare benefits, and paid holidays and vacations. By narrowing who is exempt from the FLSA, DOL has automatically broadened who is covered by the SCA. In particular, first line supervisors who previously qualified for the Executive or Administrative exemption and entry-level scientists and nurses who previously qualified for the Professional exemption may be affected. Also, workers who are engaged part-time, who job share, or work sporadically, may no longer qualify as exempt because they don’t meet the new salary threshold.

Having more SCA-covered workers may raise a contractor’s costs for overtime and SCA fringe benefits. Arguably, if your contract contains the clause at Federal Acquisition Regulation 52.222-43, “Fair Labor Standards Act and Service Contract Labor Standards—Price Adjustment (Multiple Year and Option Contracts)” you may be able to get a price adjustment. However, there are defenses the government is likely to assert. On the other hand, contractors may have an argument that requiring all of these additional workers be SCA-covered is a change to the contract, which would entitle a contractor to even broader relief.

In short, there’s a lot to do to ensure compliance with both the FLSA and SCA, as well as to submit any necessary claims to the government. Therefore, run—don’t walk—to the phone or computer and contact a lawyer who focuses on these areas.

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Some Mission Statements ARE Enforceable By Contract, Says ASBCA

Posted on Wednesday, May 4, 2016

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There are many prurient details one might choose to focus on in the recent Armed Services Board of Contract Appeals (“ASBCA”) decision App. of—Joseph Sottolano, ASBCA No. 59777, which upheld the termination of an Army baseball coach’s contract for, among other things: bad acts of a sexual nature during “the official duty day in government facility offices.” But we’re going to take the high road and discuss, yes, the U.S. Military Academy mission statement which proved to be a key factor in the decision. You’ll have to turn to the ASBCA reporter for the full (pardon the pun) play-by-play. Full disclosure: this may be the first ASBCA decision in recorded history to require the internet label “NSFW” (“Not Safe For Work”).

The core of the dispute between Coach Sottolano and the U.S. Military Academy (“USMA”) was whether the Army’s termination for cause of Mr. Sottolano’s baseball coaching contract was “justifiable” based on the hanky-panky addressed at some length in the decision. Importantly, the allegations against Mr. Sottolano included sexual activity with a government employee, sexual harassment and hostile workplace. Moreover, ASBCA assumed, without deciding, that the sexual relationship between Mr. Sottolano and the government employee was consensual, though the record included some suggestions that it had not been. The reason for that assumption, essentially, was that the Board found that Mr. Sottolano’s termination was justifiable even under the most favorable interpretation of his conduct and so did not have to reach the thornier questions of consent and harassment. And, an important factor in the Board decision was a strict reading of USMA’s “mission statement” incorporated into Mr. Sottolano’s contract.

The relevant portion of the USMA mission statement was: “[t]o educate, train, and inspire the Corps of Cadets so that each graduate is a commissioned leader of character committed to the values of Duty, Honor, Country; professional growth throughout a career as an officer in the United States Army; and a lifetime of selfless service to the nation.” Mr. Sottolano’s contract not only incorporated those words but also a termination for cause provision authorizing termination for any conduct that violated the USMA’s “mission.” The above USMA mission statement—which a casual reader might see as only standard preamble or “boilerplate” language—turned out to be pivotal. The Board found that Mr. Sottolano’s sexual activity with a government employee at a government facility—even if consensual and even if “off-duty” (as Mr. Sottolano alleged)—was inconsistent with “inspiring USMA cadets” to be “leader[s] of character” devoted to “selfless service.” The Board reasoned that it was “inconceivable” that Mr. Sottolano’s conduct would be “held up” to a USMA baseball player as a model of how to conduct oneself as a future officer in the U.S. Army (as cadets are destined to be) and, accordingly, Mr. Sottolano violated his obligation to comply with the USMA mission statement. The Board went so far as to call Mr. Sottolano’s actions an exemplar of “self-indulgent lack of professionalism.”

While upholding Coach Sottolano’s termination might seem straightforward based on the (relatively) sordid facts of the case, it is noteworthy that the Board’s decision relied heavily on the little-read “morals & values” statement (a form of which appears in virtually every government contract) and the Board was not shy about interpreting that “values” language to decide whether conduct comports with “leader[ship] of character” and “selfless service.” Ergo (we love that word), those “values statements” we all tend to skim over when reading a contract, may not be so boilerplate after all.

To view the ASBCA decision, click here.

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