Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

Last month, I broke the story about a company that was selling various employment law posters online, and the Connecticut government's response to the posters.  A post recapping all events with links to all prior posts is located here.  

One poster, in particular, dealt with a "Healthcare Advocate" poster. At that time, the company's website stated specifically  "New Poster February 2008! Employers are required to display this poster. Lists employee's rights to health insurance under Connecticut."

As of my last prior post, last month, the company, Progressive Business Compliance had not made any changes to their website nor did they provide any public comment. While I've been tied up the past few weeks, their website for this poster has now changed. 

Their website for this poster  now reads: "New Poster February 2008! Employers are REQUIRED to display this poster.  Lists the services of the Office of the Healthcare Advocate under Connecticut Law, and gives contact information for employees."  However, the company still charges $12.99 for the poster. 

Employer and human resources professionals may still wish to exercise caution about using this particular poster. First, this poster -- while apparently "new" to the company -- is not new at all. It has been a requirement for a while. Second, in response to our prior post, Connecticut's Office of Healthcare Advocate now has the exact poster available on their website.  You can download it directly from here.  Third, and most importantly, it's available free of charge. 

I'll leave it to the Attorney General to determine whether its a fair trade practice to sell a free government poster for $12.99.  Perhaps it contains a protective plastic cover.   And as I noted previously, these companies can provide a service to employers by combining various posters onto one laminated poster.  For some employers, it is a service worth paying for. 

But for employers who just want to comply with this particular law without any bells and whistles, the OHA's poster that can be downloaded free of charge will suffice just fine. 

Of course, there are other posters that must be posted as well, so employers should check with an attorney to determine if they are meeting all the legal posting requirements. 

Lastly, I have been meaning to post about another website that summarized our prior posts on workplace posters quite well.   Lawroom.com posted about it here.  Each week, Lawroom sends out an email broadcast to several thousand HR and business subscribers (primarily in California, but also nationwide and in other states). They cover case, legislative, and regulatory developments, as well as interesting news stories. They also discuss “recurring” issues in employment law – including the need for mandatory posters.  My sincere thanks to them for the reference.  Please do check them out. 

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Credit the Office of Healthcare Advocate for acting quickly.  I received word late Thursday that the Office of Healthcare Advocate -- responding, in part, to my post on Wednesday -- has now posted its required poster for employers on their website.  You can actually download the poster directly from this link. 

As detailed in earlier posts (here, here and here), employers that offer health insurance are required to post in their workplace about the services of the Managed Care Ombudsman.  It is mandated by Conn. Gen. Stat. 38a-1046.

Lastly, one final point from the Attorney General's press release yesterday (see prior posts) bears some further comment. 

Selling state compliance posters is perfectly legal - until the companies use false and deceptive claims to push their product, as many have done.

It's a valid point.  The companies that sell these posters in many ways offer a product that employers may find useful. They may laminate the poster or put a variety of information all in one. But when they overstep the line to scare employers or mislead them (and again, we'll leave that issue for the AG's office and readers to decide), they open themselves up to criticism.

A search of Google News this morning hasn't turned up any additional coverage, including any response from PBC.  Thus, until there are significant further developments that I become aware of, I'll consider this issue -- from an employment law perspective -- resolved for now.

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Secretary of State Susan Bysiewicz and Connecticut Healthcare Advocate Kevin Lembo released their own press release (download here) this afternoon regarding the investigation into Progressive Business Compliance. 

According to the press release, Bysiewicz and Lembo are  "warning Connecticut's business community about a deceptive marketing campaign that falsely claims there is a 'new' requirement that employers purchase compliance posters or face fines of $7500."  Bysiewicz is also investigating whether the company is operating legally in Connecticut. 

The Connecticut Employment Law Blog first broke the story of this marketing effort and discussed what the employer's real obligations were under the law yesterday (see previous posts here and here.)  Earlier today, I noted Attorney General Richard Blumenthal's statement. It is now available online here. 

The press release states:

“Today we are warning Connecticut business owners – do not be duped by the scare tactics of this unauthorized campaign and these phony “new” requirements,” said Bysiewicz. “My office has launched an investigation to determine if Progressive Business Publications is operating legally in Connecticut and I applaud Attorney General Blumenthal for his investigation of PBP for potential fraud. We urge anyone who has fallen prey to this scam to contact our offices.”

The marketing campaign, consisting of blast-faxes and emails from PBC, is entitled: "CONNECTICUT HEALTHCARE ADVOCATE, OFFICIAL NOTICE". This campaign is NOT authorized by the Office of the Healthcare Advocate, State of Connecticut. The promotion falsely states that this is a "NEW" requirement, and encourages the reader to purchase the poster under threat of "fines of up to $7,500." The solicitation gives potential buyers an option of purchasing a single compliance poster for $12.99 or a “Complete Connecticut State Kit” consisting of 11 posters for $89.99.

“As soon as we were notified of this scheme we took action,” said Lembo. This marketing campaign and solicitation are in no way authorized by the Office of the Healthcare Advocate. This scheme targets business owners trying to play by the rules. Business owners who are required to post health insurance information may contact my office and receive this poster free of charge.”

The Connecticut General Statutes (CGA 38a-1046) require that employers who offer a fully-insured health insurance product to their employees, "shall obtain from the Healthcare Advocate and post, in a conspicuous location, a notice concerning the services that the Healthcare Advocate provides." The notice/poster that fulfills this requirement is available, free of charge, by contacting the Office of the Healthcare Advocate at 1-866-466-4446 or healthcare.advocate@ct.gov.

As before, I'll update with any noteworthy developments.

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Yesterday, I broke the story about Progressive Business Compliance charging money for a free poster for a state and then highlighted the company's website which made certain representations about the state of the law in Connecticut. 

In my post yesterday, I indicated that one of my colleagues had received some marketing materials that suggested there were new requirements and that the company's website had indicated it was now effective February 2008.

I received an e-mail shortly after my post from Kevin Lembo, of Connecticut's Office of Healthcare Advocate, indicating that action would be announced soon relating to the poster and the company.  (He also posted a comment to the blog indicating that the poster that I made available yesterday was indeed the state-mandated poster.) 

HartfordBusiness.com now confirms that the Attorney General Richard Blumenthal has opened an investigation against Progressive Business Compliance and other companies that market these types of workplace posters. 

According to the HBJ, Blumenthal has issued a press release stating the following:

PBC deserves a state warning poster of its own about consumer protection laws... Deliberately deceiving consumers into purchasing posters - through false claims about legal requirements or a company's government affiliation - is plainly prohibited by our consumer protection laws.

This is a welcome step.  As companies in Connecticut are aware, Blumenthal has a knack for going after companies he perceives as violating the law. 

I should be getting some additional information from the State later today and will issue a followup when warranted.

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Yesterday, I summarized a proposal by Connecticut Attorney General Richard Blumenthal to revise the state's whistleblowing laws. The Hartford Courant reported on Wednesday that Blumenthal testified before members of the General Assembly's black and Latino caucus on that issue.  Today, I'll take a look at it in more detail.

As I indicated yesterday, the Hartford Courant and others reporting on the case used the term "strengthen" to describe the changes to the laws. Although I'm not one for word-smithing articles, that term strikes me as a bit loaded for a few reasons.

First, it suggests that the state's whistleblower protection laws are "weak" -- which I'm not sure is the case. Second, it begs the question: how would it "strengthen" the laws and from what perspective? Third, what does it even mean to "strengthen" a law? And fourth, would this "strengthen" or affect existing constitutional retaliation claims that already exist to protect employees who report matters of public concern? The Courant's article, unfortunately, does not address these issues.

One issue that ought to be looked at, for example, is the proposal is to create a rebuttable presumption that an change in employment status (a transfer, for example) within three years of a person's complaint, is retaliatory. That creates a huge shield for employees and encourages them to file complaints -- even those that may not be warranted.

Moreover, such a proposal ignores what courts have been concluding over the years (see cases here and here for two recent examples): it is highly unlikely that an employer would wait a year -- much less three years -- to "retaliate" against such a complaint.

The U.S. Supreme Court said a few years ago in Clark County Schools v. Breeden, 532 U.S. 268 (2001) in a unanimous, unsigned opinion:

The cases that accept mere temporal proximity between an employer's knowledge of protected activity and an adverse employment action as sufficient evidence of causality to establish a prima facie case uniformly hold that the temporal proximity must be "very close."... Action taken (as here) 20 months later suggests, by itself, no causality at all.

Given the highest court's reasoned conclusion that a transfer or firing taken 20 months after a person's complaint does not suggest a connection between the two (and even highlighting cases that say 3 months is too long), what is the rationale behind the proposed legislation assuming such a connection up to 36 months later?

Another question that should be examined is whether the proper role of the AG's office is preserved.  For example, on the AG's website, the AG's Department of Employment Rights indicates that it is designed to defend "state agencies and state officials in employment related litigation and administrative complaints and provides legal advice and guidance to state agencies on employment issues."  Obviously, if the AG is interfering in whistleblowing cases, the AG's office cannot serve in a dual capacity -- representing the employees and the agency as well. How will such a determination be made if the AG's office is allowed to intervene as proposed?

Certainly a review of existing laws to update them and to ensure protection to whistleblowers is appropriate.  And none of the issues I raise above are unresolvable. But before the legislature takes action, it should vet the provisions thoroughly. What makes for good headlines may not make for good law.

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On Friday, Connecticut Attorney General Richard Blumenthal proposed new legislation to change the state's whistleblower laws.  Video from the press conference is available on Senator Edith Prague's website. 

Before the changes are discussed, it is useful to understand the state already has an existing whistleblower statute, Conn. Gen. Stat. Sec. 4-61dd and that enforcement of the statute falls within the purview of the Connecticut Commission on Human Rights and Opportunities. The CHRO has a portion of their website devoted to this area.

So what are the proposed changes? The changes would include:

• Allowing the Attorney General to intervene on behalf of whistleblowers in an administrative hearing on retaliation;
  
• Extending the time period for the rebuttable presumption that adverse personnel action is retaliation to three years from the date the whistleblower filed a complaint pursuant to the whistleblower statute;
  
• Authorizing the hearing officer to grant temporary relief to rescind a retaliatory action during the pendency of the hearing and to grant motions to amend the complaint if additional incidents of retaliation occur during the hearing.
  
• Requiring the hearing officer to send any finding of retaliation to the supervisor of the person found to have committed retaliation as well as the governor, head of the agency and the Commissioner of Administrative Services. Such individuals shall take appropriate personnel action.
  
• Requiring that the hearing officer's decision and any subsequent personnel action against the person who engaged in retaliation be a public record and shall be posted on the Department of Administrative Services' website

The Hartford Courant provides some additional background for the proposed changes as well including reference to an ongoing complaint against the Department of Corrections. 

Tomorrow, I will analyze the proposal and highlight some issues that the legislature ought to consider when it debates the bill.

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The Hartford Courant has a lengthy piece today about the rise and fall of the Mortgage Lenders Network.  From an employment perspective, the piece recounts how the Connecticut Department of Labor came across one of the largest cases in the state of a company failing to pay wages, at least $1.5 million. 

Gary Pechie, the director of the state Department of Labor's wages and workplace standards division, was used to dealing with minor cases of businesses - the pizza shops, the independent grocers - who didn't pay their employees.

He rarely saw a case as a big as MLN. High-flying loan officers had been stiffed out of thousands of dollars, some hundreds of thousands, in commissions. And the complaints kept coming in.

Pechie sent two wage enforcement agents down to MLN on Jan. 23.

One of those agents, Frank Royce, had 17 years on the job. He and agent Mike Witkowski pulled up at MLN in Middletown at about 10:30. Human resources director Gary Porter told the agents that the company was "experiencing some problems" and that it wasn't clear "if or when some of the employees would be paid."

Porter produced a partial list. Royce did a little mental math to figure out what employees were owed. He came up with about $1.5 million. Later in the day, Porter came up with more.

When he and Witkowski got back in the car, Royce was quiet for a moment. Then he spoke.

"Wow," he said. "This is going to be big."

The article goes on to report that:

On March 9, the labor department asked the chief state's attorney to issue a warrant for [MLN head Mitchell] Heffernan's arrest for failing to pay nearly $3 million in wages, mostly commissions. Failing to pay wages in Connecticut is a Class D felony and can lead to jail time, fines or both....

[The DOL] and Attorney General Richard Blumenthal pursued the criminal charge in Connecticut. Heffernan fought the state's right to seek such a warrant while MLN was in bankruptcy. After a federal bankruptcy judge ruled that the matter didn't belong in that court, Heffernan appealed. A trial is pending on the legal question.

A look at the actual court documents reveals some more details and, from a legal perspective, Heffernan's tactics have staved off action by the DOL.  So far, it appears to have bought him several more months of legal limbo.

Upon learning of potential criminal charges against him, Heffernan filed a motion to enjoin the state from criminal prosecution.   The State of Connecticut, led by AAG Robert Clark, filed its objection on April 5, 2007.  Heffernan filed a supplemental brief a few days later with many more details and claiming that the criminal prosecution was a result of intense media scrutiny.  On April 10, 2007, the bankruptcy court denied Heffernan's request.

However, Heffernan's appeal of that decision has bought more time for him.  He appealed to the District Court of Delaware.  A briefing schedule reveals that it is unlikely the state will get any resolution of this matter until next year because final briefs are not due until late December 2007.  (It is unclear where the Courant's notion of a trial comes into play; the scheduling order of the court only referred to motion practice.) Because of the elevation of the assigned District Court judge to the matter (Judge Kent A. Jordan), the case does not yet have a district court judge formally assigned to it, which may further delay resolution of this matter. 

For MLN workers, the case is surely a frustrating one.  But the state's continued pursuit of this employer demonstrates that failing to pay wages is one type of action that the state won't tolerate. For employers in the state, its a good lesson and one that more employers would be wise to follow. 

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