Effective July 2, 2013, Wisconsin eliminated its Building Contractor Registration Program.[1]    The Building Contractor Registration Program was eliminated in connection with the passage of Wisconsin’s Biennial Budget Act.  A new statute was also enacted that prohibits the Department of Safety and Professional Services from creating or enforcing any administrative rule that would require any person engaging in the construction business to hold any license, except a license specifically required by statute.[2]

Under former law, no person or entity could legally work in the construction business in Wisconsin without being registered as a Building Contractor, unless the person or entity held a Dwelling Contractor Certification or some other Wisconsin construction license.  The Building Contractor Registration requirement was therefore the “catch-all” credential requirement for those who held no other credential.  In order to obtain the Building Contractor credential, the applicant was merely required to submit the appropriate application form, certify compliance with Wisconsin’s statutory worker’s compensation and unemployment compensation requirements, and pay the registration fee.  The registration had to be renewed every four years.  There was no requirement that an applicant possess any special skills or qualifications.  The Building Contractor Registration Program had therefore been criticized as being little more than an excuse to charge a fee.

If you have any questions regarding this article, please contact Attorney Steve Slawinski at O’Neil, Cannon, Hollman, DeJong and Laing S.C. at 414-276-5000.
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[1] 2013 Wis. Act 20 § 1708e, repealing Wis. Stat. § 101.147.
[2] 2013 Wis. Act 20 § 1708f, enacting Wis. Stat. § 101.1472(2) (2013).

Generally, the “ministerial exception” allows religious employers to avoid liability for discrimination claims when making employment decisions concerning employees who qualify as “ministers.”  The exception is rooted in religious freedom principles found in the U.S. Constitution.  Specifically, the First Amendment of the U.S. Constitution provides that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”  The first part of this amendment is known more commonly as the “Establishment Clause” and the second part is commonly known as the “Free Exercise Clause.”  The U.S. Supreme Court has held that a church’s selection of its leaders is grounded in the Free Exercise Clause.  The Free Exercise Clause recognizes that “perpetuation of a church’s existence may depend upon those whom it selects to preach its values, teach its message, and interpret its doctrines both to its own membership and to the world at large.”

More than one year ago, the U.S. Supreme Court confirmed that claims involving the employment relationship between a religious institution and its ministers exempt employers from liability under Title VII pursuant to the “ministerial exception” founded upon an employer’s First Amendment rights. In Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, the Supreme Court held that:

Generally, the “ministerial exception” allows religious employers to avoid liability for discrimination claims when making employment decisions concerning employees who qualify as “ministers.”  The exception is rooted in religious freedom principles found in the U.S. Constitution.  Specifically, the First Amendment of the U.S. Constitution provides that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”  The first part of this amendment is known more commonly as the “Establishment Clause” and the second part is commonly known as the “Free Exercise Clause.”  The U.S. Supreme Court has held that a church’s selection of its leaders is grounded in the Free Exercise Clause.  The Free Exercise Clause recognizes that “perpetuation of a church’s existence may depend upon those whom it selects to preach its values, teach its message, and interpret its doctrines both to its own membership and to the world at large.”

More than one year ago, the U.S. Supreme Court confirmed that claims involving the employment relationship between a religious institution and its ministers exempt employers from liability under Title VII pursuant to the “ministerial exception” founded upon an employer’s First Amendment rights. In Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, the Supreme Court held that:

“Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such an action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs. By imposing an unwanted minister, the state infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments.”

The Supreme Court in Hosanna-Tabor refused to adopt a rigid formula for deciding when an employee qualifies as a minister. So, one of the primary questions that remains after the Supreme Court’s decision in Hosanna-Tabor has been how broadly the courts will interpret “minister” and which employees will be covered by the ministerial exception.

One of the first opportunities to test the Supreme Court’s ruling in Hosanna-Tabor presented itself in Dias v. Archdiocese of Cincinnati, a case coming out of the U.S. District Court for the Southern District of Ohio. On June 4, 2013, a jury returned a verdict for Crista Dias, a former technology coordinator for two Catholic schools in the Cincinnati area. Dias filed a complaint against the Archdiocese alleging the Archdiocese terminated her for being pregnant and unmarried in violation of Title VII’s ban on sex and pregnancy discrimination.

The Archdiocese moved to dismiss Dias’ complaint by invoking the “ministerial exception,” but the district court denied the motion. The court found that Dias was not a minister for purposes of the ministerial exception to Title VII because Dias taught computer classes and because she was a non-Catholic who was not permitted under church rules to teach religion to her elementary school students. If the Ohio Archdiocese appeals the jury’s verdict, it will have an opportunity to pursue defense of the claim under the ministerial exception at the federal appellate court level, which will give the appellate court a chance to develop the standard for determining when an employee qualifies as a minister.

Religious-based employers should closely follow the developing case law of the ministerial exception for guidance as to which employees will be considered “ministers” within the meaning of the exception.

Attorney Peter Walsh has published an article titled “Multijurisdictional Practice of Law Issues in Estate Planning,” in the June, 2013 issue of the national estate planning magazine Estate Planning (an RIA Publication).  The article addresses the complex issue of the extent to which an estate planning attorney may provide legal services to a resident of a state in which the attorney is not licensed.  Peter has lectured on this subject to Milwaukee Bar Association (February, 2012) and the Estate Planning Section of Wisconsin State Bar (November, 2011).

Peter’s interest in this area springs from his own multijurisdictional estate planning practice.  As an attorney licensed to practice law in Wisconsin, Illinois, and Florida, Peter regularly provides legal assistance to residents of these states, and he has extensive experience with nuances of the laws of each state.

Peter is a member of the Trust and Succession Planning and Business Law practice groups of O’Neil, Cannon, Hollman, DeJong and Laing.  Licensed in Wisconsin, Illinois, and Florida and with a Masters of Law degree in taxation, Peter assists clients in all areas of tax and estate planning. 

Historically, if a person is no longer able to make decisions regarding their health or finances, one had to commence a legal proceeding to have the person declared incompetent. The court then appointed a guardian and, to some degree, played a supervisory role over the guardian’s decisions and actions.

People often created Powers of Attorney which would deal with financial issues in particular. So for example, if I was trying to sell my house but then moved out of town, I could create a Power of Attorney to have someone else sign the papers on my behalf. In a more permanent way, I could also create a Power of Attorney to have someone else sign checks for me or engage in other identified financial transactions.

A Durable Power of Attorney is a useful tool chosen by many people to give competent individuals the ability to choose a person to manage their affairs and assets in the event of incompetency. As people age and, for example, as increasing numbers of individuals suffer various affirmaties of old age, the Durable Power of Attorney avoids public court proceedings and provides an individual to help make these difficult decisions.

A Durable Power of Attorney is intended to delegate authority to another even if the person signing the Durable Power of Attorney became incompetent in the future.

In a recent Wisconsin Supreme Court case, one of the justices wrote an opinion to put Durable Powers of Attorney in a larger societal and legal context:

A Durable Power of Attorney, unlike the Common Law Power of Attorney, survives the principal’s disability or incapacity.

Many people now will create Durable Powers of Attorney and name their spouse as a person who can make financial decisions should that become necessary in the future. As the State Supreme Court said:

[D]urable Powers of Attorney are intended to give competent individuals the ability to delegate to an agent broad power to manage their affairs and assets in the event of incompetency.

* * *

The Durable Power enhances the autonomy of the principal by enabling a principal to make decisions for himself or herself while competent that will continue to be effective if the principal becomes incompetent.

The Durable Power of Attorney can improve the living conditions of the elderly and provide security for their future care. A Durable Power of Attorney can help a competent principal to handle his or her financial and legal affairs and living arrangements and then can enable the attorney-in-fact, the agent, to handle the principal’s finances and day-to-day quality of life without having to declare the principal incompetent and without having to seek court supervision.

Many people would not object to asking their spouse or other trusted family member or friend to serve as a Durable Power of Attorney. Having said that, by merely signing a Durable Power of Attorney, a principal is potentially giving the agent very significant power over one’s finances and can even be authorizing the emptying of bank accounts. Further, as time goes by, things might change and the spouse’s health might become questionable such that one would want to terminate the Durable Power of Attorney. In that case, one might consider naming an adult child to serve in that capacity.

While Wisconsin has a statute to address some of these issues, there is very little case law interpreting the statute or developing a body of law to assist individuals and attorneys with respect to Powers of Attorney. People considering these issues should contact an attorney who handles elder law issues to explore whether this type of document is appropriate for any individual’s situation.

If you have any questions regarding this article, please contact Attorney Randy Nash at O’Neil Cannon at 414-276-5000.

Almost 99% of today’s information created by businesses is generated and stored electronically.  The ability to easily and conveniently store large amounts of data has created a hidden liability that did not exist in the age of when companies maintained its information primarily in paper format.  The effect of this hidden liability is twofold.  First, companies create more information then they know what to do with. Second, companies sometimes delete or destroy data and information that they actually do need.

For the unwary, these hidden liabilities may become exposed when your company is faced with a lawsuit.  In today’s litigation, the age of electronic data has generated a paradigm shift away from traditional paper documents to digital information.  This shift has changed the discovery process in litigation by changing what attorneys are looking for; how they are looking; and where they are looking for relevant information.  Companies can expect in today’s litigation that the way it stores and preserves electronic information will be a central topic during the discovery process that will involve not only your record custodians, but also your information technology department.  How well a company manages and preserves its electronic information may be an outcome determinative factor for it in litigation.

Today, companies that find themselves involved in a lawsuit oftentimes are faced with attacks through the discovery process as to how they typically store and delete electronic information.  The purpose of this inquiry is to set the expectation as to what electronic information, such as e-mails, the company should or should not reasonably have at its disposal for discovery purposes.  Companies that do not have a well-drafted record retention plan that addresses electronic information and which incorporates a comprehensive litigation hold policy may find themselves at a significant disadvantage in trying to defend what might otherwise be a winning case.   That is why it is more important than ever for all companies, both large and small, to effectively manage their electronic information.  This means that companies must be litigation-ready by taking affirmative actions that allow the company to effectively manage and retain electronic information. It is simply too late to start thinking about the manner and method of retention and destruction of electronic data after you have been served with a lawsuit.

The best tools to avoid these hidden liabilities is a record retention policy that addresses electronic information as well as a litigation hold policy that is designed to preserve electronic data once litigation is reasonably anticipated.  A record retention policy should be designed so that your company does not destroy information that it is obligated to maintain and at the same time the policy should be designed to destroy or delete information that the company no longer needs and/or is no longer mandated to maintain.  Most companies have some sort of document retention policy.  These retention policies were originally implemented to manage the volume and space occupied by paper documents.  Companies have been less diligent, however, in applying their retention policies to the electronic information that they store on their servers and individual computer hard drives.  This lack of diligence in managing electronic data has created a treasure trove for plaintiffs’ lawyers looking for the proverbial “smoking gun,” such as that e-mail that explains exactly what motivated the company’s decision to terminate that troublesome employee.

A litigation hold policy has long been an important concept in litigation.  In simple terms, it means that once you are sued, you have to stop destroying documents.  It is an easy concept to understand when applied to paper documents, but it becomes a much more complicated task when dealing with electronic information.  Electronic evidence can easily disappear, be altered or destroyed if not properly preserved.  For example, some companies’ computer systems provide for automatic deletion of e-mails and documents, so stopping that process takes an affirmative effort on behalf of management.  When implementing a legal hold, a company needs to approach the hold requirement with a coordinated team effort.  Business units, IT, records management and custodial personnel, and either in-house or outside counsel need to be involved and work together in the process of implementing the hold.

The failure to have a properly drafted record retention policy as well as a litigation hold policy may result in serious and adverse consequences for your company and may compromise your company’s ability to defend itself in a lawsuit.  For example, failure to have these policies in place can result in court-imposed sanctions, adverse jury instructions and significant monetary awards.

For example, a federal district court in Illinois recently agreed to permit the jury to be instructed that it can assume computer data destroyed by an employer would be unfavorable to its defense in an employee’s lawsuit under the Americans with Disabilities Act when the employer permitted a software program to automatically overwrite computer data relevant to the claims in the case.  It made no difference that the employer did not act intentionally in deleting the information, rather, the district court found that the employer’s failure to prevent the automatic deletion made it “at fault” relative to its duty to preserve evidence that was discoverable pursuant to the Federal Rules of Civil Procedure.  Consequently, thinking ahead and addressing the hidden liabilities created by your electronic information can save your company time and money, and, more importantly, potentially prevent your company from having to incur an unfavorable judgment as the result of electronic information being inadvertently deleted.

The EEOC is statutorily obligated to enter into confidential conciliation efforts with an employer prior to commencing a lawsuit.  Only if the EEOC is unable to secure a conciliation agreement acceptable to it may it bring a civil action, as conciliation is a condition precedent to the EEOC’s power to sue.  The purpose of this requirement is to encourage settlement of discrimination cases through voluntary compliance, rather than litigation.  If the EEOC commences suit against an employer without first engaging in a good faith effort to conciliate the case, the employer may seek dismissal of the lawsuit because conciliation raises a quasi-jurisdictional issue.

Despite case law to the contrary, the EEOC has now attempted to argue that a federal district court is without authority to review the EEOC’s pre-suit conciliation efforts.  In EEOC v. Mach Mining, the EEOC has argued that an employer cannot challenge the EEOC’s pre-suit conciliation efforts because Title VII prohibits disclosure of conciliation efforts in a subsequent proceeding.  The federal district judge, however, was not persuaded by the EEOC’s argument as he found that the prohibition was in conflict with Title VII’s mandate that the EEOC must attempt to conciliate with the employer prior to bringing a civil action.  Moreover, the federal district judge also held that Title VII’s prohibition regarding disclosure of conciliation efforts goes to the introduction of such evidence relative to the merits of the case and not to introducing such evidence for the purpose of determining whether the EEOC first satisfied its prerequisite to bringing suit.

Nevertheless, the federal district judge granted the EEOC’s motion to seek an interlocutory appeal before the Seventh Circuit because there exist a split between the federal circuits as to the scope of a court’s review of the EEOC’s conciliation efforts – an issue that the Seventh Circuit has not yet addressed.  Some circuits employ a “deferential standard” inquiring only whether the EEOC made an attempt to conciliate whereas other circuits apply a “heightened scrutiny standard” which requires the EEOC to make a sincere and reasonable effort to negotiate by providing the employer with an explanation as to the reasonable cause for its belief that Title VII has been violated and an adequate opportunity to respond to all charges and negotiate a possible settlement.

The federal district court certified the following two questions for the Seventh Circuit on appeal: (1) Is the EEOC’s conciliation process subject to judicial review?, and (2) if so, is that level of review a deferential or heightened scrutiny level of review?  It would be anticipated that the Seventh Circuit will hold that the EEOC’s conciliation is subject to judicial review and will most likely find that a district court’s scope of review will include a determination as to whether the EEOC in fact engaged in conciliation and whether that effort was made in good faith.  We will update this blog article when the Seventh Circuit issues its decision.

OSHA has literally opened the door for union organizers to enter an employer’s non-union facility during an OSHA walkaround inspection. In a February 21, 2013 interpretation letter, Richard E. Fairfax, OSHA’s Deputy Assistant Secretary, opined that employees without a collective bargaining agreement may designate a person affiliated with a union or community organization to act on their behalf as a walkaround representative. Mr. Fairfax opined that the OSH Act, specifically, 29 U.S.C. § 657(e), authorizes participation in the walkaround portion of an OSHA inspection by “a representative authorized by the employer’s employees.” Mr. Fairfax further attempts to support his opinion by citing to the underlying OSHA regulations, 29 C.F.R. § 1903.8, which explicitly allows walkaround participation by an employee representative who is not an employee of the employer when, in the judgment of the OSHA compliance officer, such a representative is “reasonably necessary to the conduct of an effective and thorough inspection.”

Mr. Fairfax’s interpretative letter conveniently fails to acknowledge that permitting a non-employee to participate in the walkaround inspection is an exception to the express part of the regulation that provides that “[t]he representative(s) authorized by employees shall be an employee(s) of the employer.” Further, Mr. Fairfax fails to acknowledge that the exception permits only those third parties with special expertise or knowledge to participate in a walkaround inspection, such as a hygienist or a safety engineer. OSHA’s interpretative letter fails to clarify what special skill or knowledge a union or community organizer may bring to the inspection.

OSHA’s interpretative letter also fails to clarify when an alleged “employee representative” is “authorized” by the employees. Can a minority faction of employees claim that an union organizer is their “authorized” representative when other employees may object to such individual as their authorized representative? It appears that OSHA’s interpretative letter takes a very liberal interpretation of who is or can be an “authorized” employee representative. If an employer is confronted with this scenario, should it halt the inspection and provide the compliance officer the option of conducting the walkaround without the union organizer or should the employer require OSHA to seek a warrant if the compliance officer insists that he or she will only conduct the walkaround if the union organizer is permitted to accompany the compliance officer? Obviously, these significant issues, as well as others, should be discussed with experienced legal counsel prior to permitting an OSHA compliance officer to proceed with a walkaround inspection under such circumstances.

To maintain its relevancy and expand the scope of its authority, the NLRB continues its attack upon non-union employers’ policies. This time the NLRB has positioned its cross-hairs upon employers’ “at-will” employment policies or statements. Most non-union employers include within their employee handbook a statement that employees’ employment is “at-will,” meaning either the employee or the employer may end the employment relationship at any time, for any reason, either with or without notice. Most “at-will” statements further provide that no agent or representative of the employer may enter into any agreement to the contrary unless done so in writing and signed by the president or CEO of the company. These types of statements reflect nothing more than the reality of the legal relationship between the employer and the employee.

The NLRB, however, has recently taken a different viewpoint, finding that such “at-will” statements have a chilling effect upon employees’ Section 7 rights. In American Red Cross Arizona Blood Services Region, an administrative law judge found that the employer had violated Section 8(a)(1) by maintaining the following language in a form that employees were required to sign acknowledging their at-will employment status: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The NLRB found this language to essentially constitute a waiver by the employee of his/her Section 7 rights to “advocate concertedly … to change his/her at-will status.”

The NLRB applies a two-step inquiry to determine if a work rule would “reasonably tend to chill employees in the exercise of their Section 7 rights.” First, a rule is unlawful if it explicitly restricts Section 7 activities. Second, if the rule does not explicitly restricted protected activities, it will nonetheless be found to violate the National Labor Relations Act upon a showing that: (1) employees would reasonable construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.

Due to a significant uproar from employers, the NLRB issued two sets of advice memoranda on October 31, 2012 and February 4, 2013, back-pedaling on its position with regard to “at-will” employment statements. In these advice memoranda, the NLRB now takes the position that an “at-will” statement will not be considered to interfere with employees’ Section 7 rights if the statement (1) does not explicitly restrict Section 7 rights, or (2) was promulgated in response to union or other protected activity, or (3) that the policy had been applied to restrict protected activity.

While most employers’ at-will statements will pass the NLRB’s scrutiny relative to employees’ Section 7 rights, this does not mean that all “at-will” statements, especially those that imply that there can never be any other employment relationship between the employee and employer, will be considered lawful under the National Labor Relations Act. To be prudent, employers should review their “at-will” employment statements in their employee handbooks to make sure that such statements do not foreclose to its employees the possibility of a potential modification of the at-will relationship.

The National Labor Relations Board (NLRB) has taken the position, in a recent Advice Memorandum dated January 29, 2013, that an employer’s confidentiality rule may unlawfully interfere with employees’ Section 7 rights. Section 7 of the National Labor Relations Act (29 USC § 157) guarantees employees the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. Many employers incorrectly assume that if they do not have a unionized workforce, the NLRA does not apply to them. However, many of the protections afforded under the NLRA apply to both union and non-union employers alike.

Many employers have written policies providing that employees must maintain the confidentiality of internal investigations for such matters involving employee misconduct, employee theft or workplace harassment. During the investigation process, most employers warn employees involved with the investigation to keep matters discussed during the investigation strictly confidential and not to share such information with other employees. The obvious purpose of such admonition is to maintain the integrity of the investigation and to prevent employees from fabricating or colluding to get their respective stories straight.

The NLRB, however, takes a different view. The NLRB holds that an employer violates Section 8(a)(1) of the NLRA when it maintains a work rule that reasonably chills employees in the exercise of their Section 7 rights. According to the NLRB, employees have a Section 7 right to discuss discipline or disciplinary investigations involving their fellow employees.

An employer may prohibit employees’ discussions during an investigation only if it demonstrates that it has a legitimate and substantial business justification that outweighs employees’ Section 7 rights. The NLRB’s position is that the employer must show more than a generalized concern with protecting the integrity of its investigations. Rather, an employer must show that in any particular investigation that witness(es) needed protection, evidence was in danger of being destroyed, testimony was in danger of being fabricated, or that there was a need to prevent a cover-up. Consequently, any blanket rule prohibiting employee discussions of ongoing investigations is invalid and will be held by the NLRB to violate employees’ Section 7 rights.

Most, if not all, employers recognize the importance of employees maintaining the confidentiality of any pending internal investigation. Even the NLRB has not gone as far as to hold that employees have an unfettered right to communicate about internal investigations. Employers should review their employee handbook and other policies that address confidentiality of internal investigations and make sure such policies do not contain a blanket rule regarding confidentiality. In addition, where applicable, employers should add savings clauses to their policies providing that the employer’s policy shall not be construed or interpreted to interfere with employees’ Section 7 rights. Finally, to avoid NLRB interference, employers should address the issue of maintaining the confidentiality of any internal investigation on a case-by-case basis when it can be demonstrated that maintaining confidentiality is significant to preserving the integrity of the investigation. When such a need arises, employees should be instructed on an individual basis regarding the need to maintain confidentiality about the investigation.

James DeJong has been elected the next chair of the Carroll University Board of Trustees. He will serve as chairman for three years on the board, which oversees academic, financial, and operational decisions for the private Waukesha University.

James G. DeJong, a 1973 graduate of Carroll, is president of the Milwaukee law firm O’Neil, Cannon, Hollman, DeJong and Laing and has served as a member of the University’s board since 2008.

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