HHS Item 1
July 30,2012
Worksession
MEMORANDUM
TO:
FROM:
Health and Human Services Committee
~
Robert H. Drummer, Senior Legislative Attorney \
~
Michael Faden, Senior Legislative Attorney
Worksession:
Bill 19-12, Human Rights and Civil Liberties - Displaced Service
Workers
SUBJECT:
Bill 19-12, Human Rights and Civil Liberties - Displaced Service Workers, sponsored by
Councilmembers Ervin, Rice, EIrich, Riemer and Navarro, was introduced on May 15,2012. A
public hearing was held on June 12.
Bill 19-12 would:
• require certain contractors to retain certain service workers for a 90-day transition
period;
• provide enforcement by the Office of Human Rights and the Human Rights
Commission;
• authorize the Human Rights Commission to award certain relief; and
• generally regulate the displacement of certain service workers by a covered
employer.
Background
Bill 19-12 would provide some temporary job protection for non-management service
workers when their employer's service contract is terminated. A service contract is defined as a
contract between an awarding authority and a contractor to provide security, janitorial, building
maintenance, food preparation, or non-professional health care services in a facility located in
the County which is used as a:
(1)
private school;
(2) hospital, nursing care facility, or other health care provider;
(3) institution, such as a museum, convention center, arena, airport, or music
hall;
(4) multi-family residential building or complex with more than 30 units; or
(5) commercial building or office building occupying more than 75,000
square feet.
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Property owners who hire contractors to provide these services often replace the
contractor with little or no notice to the affected service employees. The successor contractor is
not required to retain the incumbent service workers and must quickly recruit new employees.
This process often results in sudden unemployment for many of these low-wage service workers.
Bill 19-12 would require the terminated contractor to give their service workers 15 days
notice before the contract is terminated. The Bill would also require the successor contractor to
offer to retain the incumbent service workers for a temporary 90-day transition period. Bill 19­
12 would permit the successor contractor to hire less than all of the incumbent workers if they
can perform the contract with fewer employees. The successor contractor may also release an
incumbent service worker during the 90-day transition period for cause. The County Executive
supports this Bill (see ©10).
Public Hearing
There were 5 speakers at the June 12 public hearing. Gigi Godwin, representing the
Montgomery County Chamber of Commerce, (©11-12) and Shaun Pharr, representing the
Apartment and Office Building Association of Metropolitan Washington, (©20) each opposed
the Bill as an unnecessary infringement on competitiveness in the relevant marketplace. Jaime
Contreras, representing the Service Employees International Union (SEIU), (©13-14) and Ross
Eisenbrey, representing the Economic Policy Institute, (©15-26) each supported the Bill as a
small measure of job security for low wage employees. Finally, Rafael Sanchez, a service
worker who lost his janitor job at a Silver Spring office building when a new contractor was
hired to provide janitorial work for the building, (©19) testified in support of the BilL
The Council also received written testimony opposing the Bill from the Greater Silver
Spring Chamber of Commerce (©27-29) and written testimony supporting the Bill from 4
different local cleaning contractors (See ©30-33).
Issues
1.
Are there similar laws in other jurisdictions?
Laws providing similar protection for certain employees have been enacted in other
jurisdictions, including the District of Columbia, San Francisco, Los Angeles, Providence, and
New York City. Recently, both the Supreme Court of California, in
California Grocer's
Association v. City of Los Angeles,
52 CaL 41h 177 (2011), and the United States Court of
Appeals for the
lSI
Circuit, in
Rhode Island Hospitality Association v. City of Providence, 667
F.3d 17
(l
sl
Cir. 2011), held that this type of local law was
not
preempted by the National Labor
Relations Act. In addition, President Obama issued an Executive Order on January 30, 2009
requiring similar 90-day job protection for service workers employed by a Federal contractor
(©34-36). The Maryland General Assembly considered a similar Bill in the 2012 session but did
not enact it.
The most relevant similar law is the District of Columbia Displaced Worker Protection
Act of 1994 (DC ST §§32-10l 32-103). The law was first enacted in 1994 to cover janitors
2
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and amended in 2006 to cover other types of service workers. The law provides a similar 90-day
transition period for service workers and creates a cause of action for an employee who alleges a
violation of the law, which is enforceable by filing suit in the D.C. Superior Court.
It
is likely
that many contractors providing these services in the District also provide similar services in
Montgomery County.
2. Should enforcement of the law be delegated to the Office of Human Rights and
the Human Rights Commission?
Each law in another jurisdiction providing displaced service worker protection creates an
original cause of action in the local court system. Bill 19-12 would permit an individual to file a
complaint with the County Office of Human Rights (HR). The complaint would be investigated
by HR and would authorize the Human Rights Commission to hold an adjudicatory hearing and
order appropriate relief. A case filed under this Bill would be substantively different than the
discrimination complaints generally handled by the Office, but would follow the same procedure.
The budget for the County Office of Human Rights has been reduced in recent years as a result
of the historic drop in County revenue.
Although creating a private cause of action to enforce this Bill in the Maryland courts
would be preferable, the County does not have the authority to do so. In
McCrory Corp.
v.
Fowler,
319 Md. l2, 570 A.2d 834 (1990), the Maryland Court of Appeals held that the County
did not have the authority under the Express Powers Act to create a private cause of action
because it would be a public general law. Therefore, the County must delegate enforcement to a
County agency that can hold an adjudicatory hearing, such as the Office of Human Rights.
3. Should the Bill apply to service contracts awarded by a government agency?
Bill 19-12 excludes service contracts awarded by a Federal, State, County, or municipal
government. Some public hearing testimony questioned this exclusion. County contracts are
awarded publicly, after advertising, through a long bidding process. A new County contractor
must pay service employees at least as much as the County living wage. Therefore, a County
contractor cannot fire the old employees and bring on a new staff at minimum wage to gain a
competitive advantage. Councilmember Ervin, Bill 19-12's lead sponsor, offered an amendment
to include the County (see ©37).
The County does not have the authority to regulate Federal and State government
contracts. As mentioned, President Obama already issued an Executive Order requiring a similar
90-day retention period for service contractors on Federal contracts. The General Assembly
considered but did not enact a similar law in the 2012 legislative session.
If the Committee decides to apply this Bill to County service contracts, the Bill could be
amended as follows:
Amend lines 68-69:
Countv.
Awarding authoritv
includes the
County~
does not include
~
Federal,
State, [[County,]] or municipal government.
3
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4. Would
Bill 19-12
require the successor contractor to retain the employees at the
same pay and benefits?
No. The Bill is silent on this issue. If the employer is a union shop, the National Labor
Relations Act (NLRA) would control the obligations of the successor employer to retain wages
and benefits. Although the NLRB has adopted a successor employer doctrine that may require
the successor employer to maintain some wages and benefits, the NLRB has not yet decided if
this doctrine applies to a successor contractor who retains service employees for a 90-day
transition period as required by a state or local law.
Although this opinion is not controlling, an NLRB Administrative Law Judge held that
the employer does not become a successor employer unless the employer retains the employees
after the 90-day mandatory transition period. See
M
&
A1
Parks ide Towers, LLC,
2007 NLRB
LEXIS 27 (January 30, 2007). The AU reasoned that the successor employer doctrine is based
on the employer's conscious decision to retain the former employer's workers, and that an
employer subject to a State or local displaced workers law does not make a "conscious decision"
to retain the workers until the 90-day transition period is over.
5. Would the Bill require an employer to retain the former workers after the 90-day
transition period?
Testimony by the Greater Silver Spring Chamber of Commerce questioned whether Bill
19-12 would require an employer to make a written offer of employment beyond the 90-day
transition period. The Bill does not attempt to create any job security beyond the 90-day
transition period. This intent could be clarified by the following amendment:
Amend line 143:
employee
£!
written offer of employment for the 90-day transition period and send
£!
f.QPY
to the
6. Amendments requested by the Executive.
Council staff received several requested amendments from the Executive late on July 26.
(See email from Kathleen Boucher at ©38).
The Executive requested the following
amendments:
a.
Substitute references to "offer ofemployment" for references to "retain" on lines
139, 150, and
165. This amendment would make it clear that a successor
contractor has satisfied the requirements of the Bill when a service worker rejects
an offer of employment from the successor employer. Although Council staff
believes this is implied in the Bill as drafted, this is reasonable as long as the offer
of employment by the successor contractor is not withdrawn before the service
worker can accept it.
Amend line
134
to add that the awarding authority must ensure that "the
terminated contractor conspicuously posts, at any affected work site,
"
the written
4
b.
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notice.
This amendment would clarify the responsibility to post the notice to the
affected workers.
c.
Add the following paragraph qfter line
137
if
the Bill is amended to include
County service contracts:
ill
Where the County is the awardingauthorilY,;.
£b.l
In this
St:ction~
terminated or cancelled
means a termination for
default. termination for convenience, or mutual termination as
defined in Cltapter lIB and the County procurementre"glliatiQns;.
~d
all
This Section does not apply to a Coullty service contract awarded
by an eme[illm,cy procurement or direct
purchas~
defined
Chapter
11
B and the County procurement regulations.
d.
In
Add language that was inadvertently omitted from the Bill as introduced on line
162 as follows:
{12
Each successor contractor must not discharge
~
service employee retained
under this Section without just cause during the transition period.
7. Questions from William Kominers.
Council staff received a list of 36 questions from an attorney, William Kominers. See
©39-44. Although some of these questions are answered in the issues described above, Council
staff also received detailed responses to these questions from one of the proponents of the Bill,
the SEIU. See ©45-52. Council staff believes the responses from SEIU fairly answer the
questions. We have the following additional responses:
a.
Questions
9
&
10.
A dismissal for cause during the 90-day transition period
would not be subject to a grievance procedure in a collective bargaining contract
unless the successor contractor enters into a collective bargaining agreement with
a union that covers this. However, an employee who is dismissed for cause
during the 90-day transition period would have the right to file a complaint with
the County Office of Human Rights challenging the employer's decision.
Questions 17-20,
23. The awarding authority can obtain this information from the
terminated contractor by making it a requirement of the contract. The only
enforcement mechanism in the Bill is filing a complaint with the County Office of
Human Rights.
Question
24. Seniority is a common method of filling these service worker jobs.
Question 30.
The Bill only requires retention during a 90-day transition period.
A contractor's poor performance may be due to poor management, poor staff, or
both. The Bill does not require the successor contractor to retain managers and
the Bill permits the successor contractor to dismiss workers for poor performance.
b.
c.
d.
5
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8.
Councilmember Leventhal's Amendments.
Councilmember Leventhal requested the following amendments:
a.
Amendment
1 would replace the requirement to retain existing workers for a 90­
day transition period with a requirement to provide these workers with 90 days
notice that the service contract is scheduled to end. See ©53.
Amendment
2
would exempt service contracts awarded by a homeowner's
association, a condominium, and a housing cooperative from the requirements of
the Bill. See ©54.
Amendment
3
would remove security employees from the requirements of the
Bill. See ©55.
Amendment
4
would remove the restrictions in the Bill on retaining less than all of
the affected service workers during the 90-day transition period if the successor
contractor finds that fewer service workers are needed. See ©56.
b.
c.
d.
This packet contains:
Bill 19-12
Legislative Request Report
County Executive Memorandum
Testimony
Gigi Godwin
Jaime Contreras
Ross Eisenbrey
Rafael Sanchez
Shaun Pharr
Greater Silver Spring Chamber of Commerce
Building Service Management, Inc.
Total Quality
Integrity National Corporation
EMI
Federal Executive Order
Councilmember Ervin's July 16 Memorandum
Kathleen Boucher July 26 Email
Questions from William Kominers
Responses from SEIU
Leventhal Amendment 1
Leventhal Amendment 2
Leventhal Amendment 3
Leventhal Amendment 4
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Bill No.
19-12
Concerning: Human Rights and Civil
Liberties
Displaced
Service
Workers
Revised: May 2,2012
Draft No.
Introduced:
May 15, 2012
Expires:
November 15, 2013
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
_--:-:-:---:~
_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council members Ervin, Rice, EIrich, Riemer and Navarro
AN
ACT to:
(1)
(2)
(3)
(4)
require certain contractors to retain certain service workers for a transition period;
provide enforcement by the Office of Human Rights and the Human Rights
Commission;
authorize the Human Rights Commission to award certain relief; and
generally regulate the displacement of certain service workers by a covered
employer.
By amending
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Sections 27-7 and 27-8, and
By adding
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article X, Displaced Service Workers
Boldface
Underlining
[Single boldface brackets]
Qouble underlining
[[Double
boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bilL
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No. 19-12
1
Sec. 1.
Sections 27-7 and 27-8 are amended and Chapter 27, Article
2
3
4
X is added as follows:
27-7. Administration and enforcement.
(a)
Filing complaints.
Any person subjected to a discriminatory act or
5
6
practice in violation of this
Article~
~
or any group or person seeking to
enforce this Article or Article
may file with the Director a written
7
8
complaint, sworn to or affirmed under the penalties of perjury, that must
state:
(1) the particulars ofthe alleged violation;
(2) the name and address of the person alleged to have committed the
violation; and
(3)
any other information required by law or regulation.
9
10
11
12
13
14
*
(f)
*
*
Initial determination, dismissal before hearing.
15
16
17
(l)
The Director must determine, based on the investigation, whether
reasonable grounds exist to believe that a violation of this Article
or Article X occurred and promptly send the determination to the
complainant and the respondent.
(2)
If the Director determines that there are no reasonable grounds to
believe a violation occurred, and the complainant appeals the
determination to the Commission within 30 days after the
Director sends the determination to the complainant, the Director
promptly must certify the complaint to the Commission. The
Commission must appoint a case review board to consider the
appeal. The board may hear oral argument and must:
(A)
(B)
dismiss the complaint without a hearing;
order the Director to investigate further; or
18
19
20
21
22
23
24
25
26
27
o
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BILL NO. 19-12
28
29
30
31
32
33
34
(C)
set the matter for a hearing by a hearing examiner or the
board itself, and consider and decide the complaint in the
same manner as if the Director had found reasonable
grounds to believe that [discrimination]
Article or Article X occurred.
~
violation of this
(3)
If the Director determines that there are reasonable grounds to
believe a violation occurred, the Director must attempt to
conciliate the matter under subsection (g).
35
36
37
38
39
*
27-8. Penalties and relief.
(a)
*
*
Damages and other relieffor complainant.
After finding a violation
of this Article or Article X, the case review board may order the
payment of damages (other than punitive damages) and any other
relief that the law and the facts warrant, such as:
( 1)
compensation for:
40
41
42
43
44
45
46
*
(F)
*
*
~
financial losses resulting from the discriminatory act or
violation of Article X; and
(G)
interest
on
any
damages
from
the
date
of the
47
48
49
50
51
52
discriminatory act or violation, as provided in subsection
(c);
(2)
equitable relief to prevent the discrimination or the violation of
Article X and otherwise effectuate the purposes of this Chapter;
(3)
consequential damages, such as lost wages from employment
discrimination or
~
violation of Article X or higher housing costs
from housing discrimination, for up to 2 years after the
[discrimination] violation, not exceeding the actual difference in
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rights-displaced service workerslbillS.doc
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54
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BILL
No. 19-12
55
56
57
58
59
expenses or benefits that the complainant realized while seeking
to mitigate the consequences of the [discrimination] violation
(such as income from alternate employment or unemployment
compensation following employment discrimination); and
(4)
any other relief that furthers the purposes of this Article or Article
X or is necessary to eliminate the effects of any discrimination
prohibited under this Article.
60
61
62
63
64
65
*
ARTICLE X.
27-64.
Definitions.
As used in this Article:
*
*
DISPLACED SERVICE WORKERS PROTECTION ACT.
ill
66
67
68
69
Awarding authority
means any person that awards or enters into g
service contract or subcontract with g contractor to be performed in the
County.
Awarding authority
does not include g Federal, State, County,
or municipal government.
Contractor
means any person, including g subcontractor, which enters
70
71
72
into g service contract to be performed in the County and employs more
than 20 service employees in the entire company.
Director
means the Executive Director of the Office of Human Rights
73
74
75
and includes the Executive Director's designee.
Person
means any individual, proprietorship, partnership, joint venture,
76
77
78
corporation, limited liability company, trust, association, or other entity
that may employ persons or enter into g service contract.
Service contract
means g contract between an awarding authority and g
79
80
81
contractor to provide security, janitorial, building maintenance, food
preparation, or non-professional health care services in g facility located
in the County which is used as a:
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BILL
No.
19-12
82
83
84
ill
ill
ill
ill
ill
private school;
hospital, nursing care facility, or other health care provider;
institution, such as
£!
museum, convention center, arena, aimort,
or music hall;
multi-family residential building or complex with more than 30
units; or
commercial building or office building occupymg more than
75,000 square feet.
85
86
87
88
89
90
91
Service employee
means an individual employed on
f!
full or part-time
basis
Qy
£!
contractor as a:
92
93
ill
building service employee, including
f!
janitor, security officer,
groundskeeper, door staff, maintenance technician, handyman,
superintendent, elevator operator, window cleaner, or building
engmeer;
94
95
96
ill
food service worker, including
f!
cafeteria attendant, line
attendant, cook, butcher, baker, server, cashier, catering worker,
dining attendant, dishwasher, or merchandise vendor;
97
98
99
100
ill
non-professional employee performing health care or related
servIce.
101
102
103
Service employee
does not include:
ill
ill
£!
managerial or confidential employee;
an employee who works m an executive, administrative, or
professional capacity;
104
105
106
107
ill
ill
an employee who earns more than $30 per hour; or
an employee who is regularly scheduled to work less than 10
hours per week.
108
Successor contractor
means
f!
contractor that:
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BILL
No,
19-12
109
ill
is awarded
~
service contract to provide, in whole or in part,
110
111
112
113
114
services that are substantially similar to those provided at any
time during the previous 90 days;
ill
has purchased or acquired control of
~
property located in the
County where service employees were employed at any time
during the previous 90 days; or
115
116
117
118
ill
terminates
~
service contract and hires service employees as its
direct employees to perform services that are substantially
similar, within 90 days after
cancelled.
(hl
~
service contract is terminated or
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
This Article does not limit the ability of an awarding authority to
terminate
contractor.
~
service contract or replace
~
contractor with another
27-65.
Transition employment period.
W
Awarding authority.
At least
12
days before a servIce contract
IS
terminated, an awarding authority must:
ill
request the terminated contractor to give the successor contractor
~
complete list of the name, date of hire, and job classification of
each service employee working on the service contract;
ill
give the successor contractor
~
complete list of the name, date of
hire, and job classification of each service employee of the
terminated contractor working on the service contract;
ill
notify the collective bargaining representative, if any, of the
affected service employees of the pending termination of the
service contract; and
134
135
ill
ensure that
~
written notice to all affected servIce employees
describing the pending termination of the service contract and the
o
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BILL
No. 19-12
136
137
employee rights provided
Qy
this Article is conspicuously posted
at any affected work site.
(Q)
Successor contractor.
138
139
ill
Subject to paragraph
ill
each
successor contractor must retain
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
each affected service employee at an affected site for 90 days or
until the successor contract is teffi1inated, whichever is earlier.
ill
Each successor contractor must give each affected service
employee !! written offer of employment and send!!
gmy
to the
employee's collective bargaining representative, if any. Each
offer must:
.cAl
state the date
Qy
which the service employee must accept
the offer; and
an
ill
allow the employee at least 10 days after receiving the
notice to accept the offer.
Each successor contractor may retain less than all of the affected
service employees during the 90 day transition period if the
successor contractor:
.cAl
finds that fewer service employees are required to perfoffi1
the work than the teffi1inated contractor had employed;
an
(Q
retains service employees
Qy
seniority within each job
classification;
maintains !! preferential hiring list of those employees not
retained; and
ill.)
hires any additional servIce employees from the list, in
order of seniority, until all affected service employees have
been offered employment;
G
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BILL
No. 19-12
162
163
164
165
166
167
168
169
Approved:
ill
27-66.
must not discharge
E!
service employee retained under this
Section without just cause during the transition period.
Enforcement.
A service employee who was not retained during the transition period, or who
was discharged in violation of this Article, may file
E!
complaint with the Director
under Section 27-7.
170
Roger Berliner, President, County Council
Date
171
Approved:
172
Isiah Leggett, County Executive
Date
173
This is a correct copy ofCouncil action.
174
Linda M. Lauer, Clerk of the Council
Date
@
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LEGISLATIVE REQUEST REPORT
Bill 19 -12
Human Rights and Civil Liberties
-
Displaced Service Workers
DESCRIPTION:
This Bill would require certain successor contractors to retain certain
service workers for a 90-day transition period after taking over the
contract and provide enforcement by the Office of Human Rights and
the Human Rights Commission.
Property owners who hire contractors to provide building services
often replace the contractor with little or no notice to the affected
service workers. The successor contractor is not required to retain
the incumbent service workers and must quickly recruit new
employees. This process often results in sudden unemployment for
many ofthese low-wage service workers.
To provide notice to and temporary employment for service workers
who are subject to unemployment due to their employer's loss of a
service contract.
CAO, Office of Human Rights, Human Rights Commission
To be requested.
To be requested.
To be requested.
Laws providing similar protection for certain employees have been
enacted in other jurisdictions, including the District of Columbia, San
Francisco, Los Angeles, Providence, and New York City.
Robert
H.
Drummer, Senior Legislative Attorney, 240-777-7895
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNI CIP ALITIES:
PENALTIES:
Damages awarded by Human Rights Commission
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE. MARYl.AND 20850
Isiah Leggett
County Executive
MEMORANDUM
May 11,2012
TO:
Roger Berliner, President
)
~
County Council
Isiah Leggett
County Executive
..
FROM:
~~
I
0
SUBJECT:
Bil119-12, Human Rights and Civil Liberties - Displaced Service Workers
I am writing to express my support for Bi1l19-12, Human Rights and Civil
Liberties - Displaced Service Workers. This legislation will help us reach the important goals of
protecting our service sector workers and their families who live or work in Montgomery County
while assuring that our business environment remains competitive for companies that provide
·security, building maintenance, food preparation, or non-professional health care services.
It
can be extremely disruptive to employees when they lose their livelihood in a
sudden manner. Many in these service industries are already supporting themselves and their
families on a thin financial margin, and can be irreparably hanned even by short-tenn
interruptions in their income. The displaced workers legislation protects these workers while
allowing service companies the flexibility to make personnel decisions and be responsive to
client needs and bidding specifications - including terminating employees for just cause.
Similar legislation has been in place in Washington, DC for many years with
much success.
It
has not caused disruption to the cleaning contractor community there, nor has it
been a financial burden to the DC government. This legislation allows responsible contractors to
stay competitive while at the same time providing fair wages and benefits to employees.
It
will
improve standards for workers, and foster stability for the clients of the service companies.
For these reasons, I urge the Council to support Bill
19~12.
41~'
montgomerycountymd.gov/311
240-773-3556 TTY
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10
The Voice of Montgomery County Business
ORl REISS,
CHAIRt\1A..c~
CHRISTOPHER CARPENITO, CHAIR-ELECT
TOM McELROY, IMMEDIATE PAST-CHAIR
GEORGETTE "GIGI" GODWIN, PRESIDENT
&
CEO
MONTGOMERY COUNTY COUNCIL
BILL 19-12, HUMAN RIGHTS AND CIVIL LIBERTIES - DISPLACED SERVICE WORKERS
JUNE 12, 2012
TESTIMONY BY GIGI GODWIN
MONTGOMERY COUNTY CHAMBER OF COMMERCE
Good Afternoon.
My name is Gigi Godwin and I am the President
&
CEO of the Montgomery County Chamber of
Commerce. The Chamber
opposes
Bill 19-12 for several reasons:
The Chamber opposes efforts to undermine the at-will employment doctrine;
The Chamber opposes favoring group of employees over another, and;
The Chamber opposes limiting competitiveness and choice in the marketplace.
Similar legislation was introduced in the Maryland General Assembly in 2011 and received an
unfavorable report by the Economic Matters Committee. The County Council should also vote
this legislation down.
Bill 19-12 abrogates the doctrine of at will employment which allows employers to terminate
an employee at any time, for any reason, or no reason. The protections that belong to
employees outside of a collective bargaining agreement have been limited by law to
circumstances where employees were discharged for exercising certain public responsibilities
(jury duty) or statutory rights (civil rights protections). The scope of this legislation extends
well beyond existing protections.
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Bill 19-12 puts the interests of the predecessor contractor's employees ahead of the successor
contractor's employees.
Favoring one group of employees over another should not be
sanctioned by Montgomery County law.
The legislation mirrors protections provided through
the collective bargaining process, despite the fact that, in this instance, there is no negotiation
between an employer and a unioll. Furthermore, enforcement of this legislation by the Human
Rights Commission is unclear because their jurisdiction is limited to claims of discrimination of
designated protected classes (employment civil rights laws). Bill 19-12 also favors the workers
described in the bill over all other private sector workers, which is fundamentally unfair.
This legislation limits competition among contractors because it forces building managers to·
continue to use the existing contractor for services. Bill 19-12 also limits building owners'
choice a nd flexibility to employ a contractor that meets their needs.
For those reasons, the Chamber
opposes
Bill 19-12.
Thank you.
@
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32BJ
SEIU
SErNICE EMPLOYEES
INTEr~NA
TIONAL UNION
CTW.CLC
Testimony of Jaime Contreras before the Health and
Human Services Committee
June 12,2012
Displaced Building Service Workers Protection Act
Bill 19-12
Good afternoon Chairman Leventhal and Councilmembers Rice and
Navarro. Thank you for giving me the opportunity to testify in favor of the
Displaced Service Workers Protection legislation. My name is Jaime
Contreras, and I am Capital Area Director for 32BJ SEIU and President of the
SEIU Maryland and DC State Council. Nearly 10,000 SEIU members live or
work in Montgomery County.Local32BJ represents about 18,000 property
service workers in Maryland, DC, and Northern Virginia, including over 2,000
in Montgomery County.We represent 3,500 workers in Maryland and 7,000
residents of Maryland.
Our members are janitors, security officers and food service workers.
They clean and secure commercial office buildings, government facilities, and
schools and universities. They work hard to make ends meet, and many live
paycheck-to-paycheck.
Stronger Together
MICHAEL P. FISHMAN
President
KEVIN J. DOYLE
Executive Vice President
HECTOR J. FIGUEROA
Secretary-Treasurer
VJCE PRESIDENTS
KYLE BRAGG
GEORGE FRANCISCO
LENORE FRJEDLAENDER
BRIAN LAMBERT
VALARIE LONG
LARRY ENGELSTEIN
Assistant to the President
That's why things are especially tough for these workers when bad-actor
Local32BJ Headquarters
.
.
101 Avenue of the Americas
contractors take over at th elr worksItes. Contractor turnover occurs at a h'Igh
New York. NYI0013-1991
rate in our competitive service contract industry. Usually, a new contractor
______
2_'_2._38_8_.3_8_00_ .
will keep-on the experienced workers already employed at a worksite.
1
However, some bad-actors seek short term profits by avoiding these
Capital Area District
866925.3225
experienced workers and hiring a set of entirely new workers that it hires at
Washington
202387.321
J
lower wages. This practice is devastating for the terminated workers. Some
Baltimore 410244.5970.
are fired with less than 24-hours' noticeand have no time to save a little money
to take care of children while hunting for a new job.Hard-working men and
Connecticut District
8002285253
women are already struggling to make ends meet and their families will only
Hartford 860.560.8674
suffer more without that income or the transition time needed to find another
Stamford 203.602.66 15
job.
District
1201
2 15923.5488
Florida District
305.672.7071
Hudson Valley District
914.637.7000
Mid-Atlantic District
2 I 5.2
26.3600
National Conference of
Firemen and Oilers
202.962.0981
But it is not like this for property service workers everywhere, because
several jurisdictions have passed legislation similar to the bill you are
considering today. Displaced building service worker legislation ensures
vulnerable, low-wage workers are not arbitrarily dismissed when the building
owner, property manager or contractor they work for changes. The legislation
provides a 90 day transition period for workers to have the opportunity to
prove their value to the new contractor.
New Jersey District
973824.3225
Western Pennsylvania
417471
nA9n
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This legislation has been a success in several localities across the country including
Washington DC, where it has been in place since 1994 for janitors and since 2006 for security
officers and other service workers. The DC market is made up largely of the same contractors
as Montgomery County's markets. The State of California, and New York City,
st.
Louis City
have also passed legislation. In addition, President Obama issued an executive order offering
service employees employed by Federal contractors similar protections.
Displaced worker legislation does not just benefit and protect workers.
It
also guarantees
tenants in buildings are able to retain quality services by providing continuity in the workforce
who takes care oftheir cleaning and security.
The bill has caused no major disruption to industry.
It
has been in effect for over 17 years
in Washington DC, which remains one of the strongest commercial real estate markets in the
nation.At the request of 32BJ, Real Estate expert Hugh Kelly made a study of any possible
detrimental effects of a Displaced Worker Protection bill in Montgomery County.l He found
that it would not drive up costs for building owners nor impact the real estate market.
The legislation does not apply to small buildings or employers with fewer than 20
employees. In addition, if the new employer has just cause to believe that a worker isn't up to
par, they are free to make personnel changes. They are also free to downsize the workforce if
they determine that is necessary. I know that several cleaning contractors have submitted
letters in support of the legislation.
Displaced worker legislation would have minimal cost or financial impact on the County.
Enforcement of the legislation in Washington DC has been simple in hundreds of instances
over the past 17 years. In the vast majority of cases, a letter or phone call to the new employer
has been sufficient to ensure compliance. To our knowledge, in only three cases in all of these
years, have workers been forced to pursue enforcement through other means.
Displaced worker legislation has a track record of success in providing protection to some
of our most vulnerable workers. It is time for Montgomery County's property service workers
to have the same protection. On behalf of our members and all property service workers, I urge
you to support this simple, effective legislation. Thank you for your time.
Kelly, PhD, consultant with
Real Estate Economics;
former chief economist for Landauer Associates; findings summarized
in 2012 Memorandum: 'Montgomery Co. (MD) Displaced Worker Protection Bill' 2/13/12. On tile with SEIU 32BJ, New York
City.
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ECONOMIC
1333 H STREET, NW
,SUITE 300, EAST TOWER
POLICY
INSTITUTE
20005
• WASHINGTON, DC
PHONE: 202.775.8810' FAX: 202.775.0819
www.epi.org
Testimony of
Economic Policy Institute Vice President
Ross Eisenbrey
Montgomery County Council
June 12, 2012
Bill No. 19-12, the Displaced Service Worker Protection Act
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Testimony of Economic Policy Institute Vice President Ross Eisenbrey
Montgomery County Council
June 12,2012
Bill No. 19-12, the Displaced Service Worker Protection Act
Thank you for allowing me to testify on this model legislation to protect service workers,
folks near the bottom of the economic ladder, from unnecessary economic harm. The
National Apartment Association has a good description of the New York's Displaced
Service Worker Protection Act and its successors, including the bill we are discussing
today:
This act protects service workers (Le., janitors and security
guards) from losing their jobs when a company is sold or the employer
changes hands. To keep track of protected workers, new employers
are required to create a list containing the name, address, date of
hire and occupational classification of each building service employee.
The employer is then required to retain the workers' employment for
a set transitional period, lasting between 90 to 190 days. After this
period, the workers have preferential hiring status for employment.
In 2002, New York City Mayor Michael Bloomberg signed the
Displaced Building Service Worker Protection Act into law with
almost unanimous backing from the city council. This law serves as
model legislation for many cities with a strong labor force.
The janitors and food service workers who would be covered by the Act are low wage
workers. Despite the high cost ofliving in Montgomery County, the median wage for
Montgomery County janitors in 2011 was only $11.60 an hour, $24,128 on an annual
basis. Food service workers were paid even less: $9.59 an hour or $19,947 on an
annualized basis - a poverty wage for breadwinners in Montgomery County.
Protecting these workers from the economic disaster of unemployment when their
employers terminate or sell service contracts will make a major difference in workers'
economic security and ensure continuity for tenants. Meanwhile it will have little or no
impact on building owners, because the industry norm is for new contractors to retain
incumbent workers who are familiar with the tenants and building operations.
Management is always free to fire underperforming workers for cause, even during the
90-day transition period. The contractors who would be adversely affected are a few
"low-road" employers who try to squeeze out cost savings by undermining labor
standards.
Since
total
labor costs associated with maintenance and security workers are a small part
of building expenses - about 3.4% of revenues, according to the analysis by Hugh Kelly,
clinical professor of real estate economics at NYU any savings wrung from these
workers would be too small to make a significant difference to building owners and
would likely cause a significant deterioration of services for many tenants. And since the
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affected workers already live at the edge of poverty, the repercussions would surely
extend beyond these workers and increase demand for social services.
The jurisdictions that have enacted laws or ordinances like New York City's include
Phlladelphla, San Francisco, Los Angeles, and Washlngton, D.C., all among the most
robustly performing office markets since 2001. They have achleved hlgh levels of pricing
per square foot, a hlgh ratio of price to net income, and strong volumes of capital flow, as
shown in the following table, prepared by Hugh Kelly for hls written testimony, which
was submitted to the Council.
The table reflects investment data from all buyer categories 2001 - 2008. The returns on
operating income in jurisdictions with displaced service worker protection laws are
favorable both for the property owners and for municipalities that rely upon the
commercial real estate tax as a source of public revenue. The displaced service worker
protection laws do not appear to impede or compromise such commercial property
tax
revenues. I would note especially that Washington, DC, the first jurisdiction to enact
legislation to protect displaced service workers, outperforms the national average in price
relative to net operating income.
12.7
13.5
13.4
$37,235
My own research found no evidence to suggest that any ofthe jurisdictions had had any
difficulty implementing a displaced service worker protection law. As you know, a legal
challenge to the DC law was upheld by the U.S. Court of Appeals for the DC Circuit in
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1995 (Washington Service Contractors Coalition v. District of Columbia).
Hugh Kelly recently
conducted a survey and interviews with more than 200 real estate professionals, owners
and public officials, and none of them identified displaced worker protection laws as a
factor in building investment, pricing, or operations.
This Act would be a low cost way to provide a modicum of economic security to workers
who need all the help they can get in in our very tough economy.
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'3
Testimony of Rafael Sanchez before the Health and Human Services Committee
June 12, 2012
Displaced Building Service Workers Protection Act
Bill 19-12
Good afternoon Councilmembers. Thank you for the chance to tell my story. My name is
Rafael Sanchez. I live in Silver Spring. I used to work at 8601 Georgia Ave, Silver Spring MD
(Lee Building) as a janitor in Montgomery County
In 2010, the contractor who I worked at the Lee Plaza Office Building in Silver Spring lost the
cleaning contract. The new contractor immediately fired me and my co-workers. We were
given only a few days noticebefore we were out of work and without a paycheck. The new
contractor said they would not deal with any of the former employees because we were in a
union. They even threatened to call the police on us. This caused lots of stress and financial
hardship to me and my family. I have a family to support. Without that job, it was almost
impossible to get by. The union fought to get our jobs back, but it took 7 months and the
contractor still has not finished paying us all of the backpay they owe us.
The contractor changing at the building was not my fault. I had always got positive evaluations
on my work from the previous contractor. If this law had been in place then, all of those
problems could have been avoided.
We are not asking for any special favors, if someone is not performing their job they should be
let go - and the bill would allow the contractors to do this. All we are asking for is a fair chance
to show the new contractor that we can get the work done. That's why I support the transition
period that the Displaced Worker bill would provide.
I hope you will vote in favor of this bill.
®
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Apartment and
Off-=e
8ulld1ng AssodatJon
of Metropolitan Washington
AOBA
~
TESTIMONY BEFORE THE
MONTGOMERY COUNTY COUNCIL
ON BILL 19-12
HUMAN RIGHTS AND CIVIL LIBERTIES - DISPLACED SERVICE WORKERS
June 12, 2012
Presented By:
W.
Shaun Pharr, Esq.
AOBA Senior Vice President, Government Affairs
1050 17th Street NW I Washington, DC 20036
P: 202.2963390
!
F: 202.296.3399
www.aoba.metro.org
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GOOD AFTERNOON PRESIDENT BERLINER AND MEMBERS OF THE COLINCIL, I AM SHAUN
PHARR, SENIOR VICE PRESIDENTOF GOVERNMENT AFFAIRS FOR THE APARTMENT AND
OFFICE BUILDING ASSOCIATION OF METROPOLITAN WASHINGTON (AOBA). AOBA IS A
NON-PROFIT TRADE ASSOCIATION WHOSE MEMBERS ARE OWNERS AND MANAGERS OF
MORE THAN 96,000 APARTMENTS UNITS AND OVER 21 MILLION SQUARE FEET OF OFFICE
SPACE IN SUBURBAN MARYLAND, THE MAJORITY OF WHICH ARE IN MONTGOMERY
COUNTY. I APPRECIATE THE OPPORTUNITY TO APPEAR TODAY ON BILL 19-12, THE
DISPLACED SERVICE WORKERS ACT.
FIRST, LET ME ADVISE THE COUNCIL THAT AOBA MEMBERS CATEGORICALLY REJECT
THE ASSERTION THAT BUILDING OWNERS PUT SERVICE CONTRACTS OUT FOR BID AT
EVERY OPPORTUNITY, SOLELY TO WRING OUT SAVINGS FROM SERVICE CONTRACTORS.
THE PRIMARY GOAL IN BOTH OFFICE AND APARTMENT BUILDINGS IS TO ATTRACT AND
RETAIN TENANTS. WHEN TENANTS ARE SATISFIED, BUILDINGS ARE MORE FULLY
OCCUPIED, PEOPLE ARE EMPLOYED, RENTS AND TAXES ARE PAID, AND EVERYONE
BENEFITS. SIMPLY PUT, TENANT ,SATISFACTION IS PARAMOUNT. WHEN CURRENT
TENANTS ARE NOT SATISFIED, OR WHEN SOME ASPECT OF A BUILDING'S MAINTENANCE
OR OPERATION REDUCES ITS APPEAL TO CURRENT OR PROSPECTIVE TENANTS, THEN
BUILDING MANAGERS MUST TAKE STEPS TO SEE THAT ESSENTIAL, POSITIVE CHANGES
OCCUR.
EFFORTS ARE ALMOST ALWAYS MADE FIRST TO OBTAIN IMPROVED PERFORMANCE
FROM THE SERVICE PROVIDER WHICH IS CURRENTLY UNDER CONTRACT. PUTTING A
PARTICULAR SERVICE CONTRACT OUT FOR COMPETITIVE BID IS AND ALWAYS HAS
BEEN ONE OF THE PRIMARY MEANS OF SECURING ESSENTIAL IMPROVMENTS WHICH
THE CURRENT CONTRACTOR HAS BEEN UNABLE OR UNWILLING TO MAKE. QUALITY
AND COST ARE THE TWO FUNDAMENTAL REASONS WHY A SERVICE CONTRACT IS PUT
2
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OUT FOR COMPErlTIVE BID, WITH UNACCEPTABLE PERFORMANCE BY THE INCUMBENT
CONTRACTOR ACCOUNTING FOR THIS DECISION IN THE GREAT MAJORITY OF CASES.
THE BILL WOULD REQLIIRE A NEW CONTRACTOR TO, AT LEAST INITIALLY, HIRE EVERY
EMPLOYEE OF THE PREVIOUS CONTRACTOR. YET, IN MANY CASES, IT IS THE
PERFORMANCE OF THE WORK FORCE WHICH HAS DICTATED THE NEED FOR CHANGE.
DOES THE COUNCIL REALLY WANT TO PASS A STATUTE WHICH FORCES A NEW
CONTRACTOR TO RETAIN EMPLOYEES WHOSE WORK WAS NOT MEETING THE
BUILDING'S STANDARDS? HOW LOGICAL IS IT TO BELIEVE THAT PERFORMANCE
PROBLEMS LIE WITH POOR SUPERVISORS AND MANAGERS, WHEN PERSONS USUALLY
BECOME SUPERVISORS BECAUSE THEY THEMSELVES HAVE DEMONSTRATED THAT
THEY ARE QUALITY PERFORMERS THEMSELVES? EVEN ASSUMING THAT SUPERVISION
IS THE PROBLEM, THE FACT IS THAT MANY SUPERVISORY PERSONNEL WOULD ALSO
HAVE TO BE RETAINED UNDER BILL 19-12.
THE SAME PROBLEM FACES THE CONTRACTOR WHO HAS WON A CONTRACT BECAUSE
ITS SERVICES WERE THE MOST COMPETITIVELY PRICED. PERHAPS ITS LOWER BID WAS
POSSIBLE BECAUSE A MORE EFFICIENT MANAGEMENT APPROACH, OR USE OF STATE­
OF-THE-ART EQUIPMENT, ENABLE IT TO DO A BETTER JOB WITH FEWER EMPLOYEES
THAN THE OUTGOING CONTRACTOR USES. WHAT HAPPENS TO THAT LOWER BID WHEN
THE NEW CONTRACTOR IS FORCED TO HIRE MORE EMPLOYEES THAN IT NEEDS TO DO
THE JOB? THIS BILL FORCES IT TO, FIRST, HIRE ALL OF THE PREVIOUS INCUMBENT'S
EMPLOYEES; AND THEN IT DICTATES THAT, IN CLASSIC TRADE UNION FASHION, THE
CONTRACTOR MAY SUBSEQUENTLY DECIDE WHICH ONES MUST BE RETAINED AND WHO
CAN BE LET GO BASED SOLELY ON SENIORITY-- NOT ON SKILLS OR PERFORMANCE.
3
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THE CONCERNS OF PROPERTY OWNERS AND MANAGERS REGARDING BILL 19-12 ARE
STRAIGHTFORWARD. IT WILL IMPAIR THE ABILITY OF SERVICE PROVIDERS TO MAINTAIN
THE COMPETITIVE ADVANTAGES THEY HAVE RIGHTLY ACHIEVED THROUGH MORE
STRINGENT EMPLOYEE PERFORMANCE STANDARDS AND COST-EFFECTIVE METHODS
THAN THOSE USED BY THEIR INDUSTRY COUNTERPARTS. IN DOING SO, IT WILL
SEVERELY RESTRICT THE ABILITY OF ANY SUBSEQUENT CONTRACTOR TO MAKE THOSE
POSITIVE CHANGES WHICH ARE NECESSARY FOR A BUILDING'S MANAGEMENT TO
MAINTAIN TENANT SATISFACTION. AS A RESULT, TENANT SATISFACTION WILL SUFFER,
TENANT SAFETY CONCERNS WILL BE RAISED AND LIABILITY RISKS OF BOTH
CONTRACTORS AND BUILDING OWNERS AND MANAGEMENT WILL BE INCREASED.
FROM THE CONTRACTORS' PERSPECTIVE, IT POSES MANY OTHER CONCERNS. FOR
EXAMPLE, WHAT WILL BE THE EFFECT ON PROVIDERS WITH MORE STRINGENT
EMPLOYEE SCREENING REQUIREMENTS? CAN AN INHERITED EMPLOYEE BE REQUIRED
TO SUBMIT TO DRUG TESTING, IF THAT IS THE NEW EMPLOYER'S POLICY? IS REFUSAL
TO DO SO "JUST CAUSE" FOR DISMISSAL? IF THE SUCCESSOR CONTRACTOR DOES NOT
HIRE PERSONS WHO HAVE BEEN CONVICTED OF CERTAIN CRIMES, SUCH AS THEFT, BUT
THE PRIOR CONTRACTOR DID, MUST THE NEW CONTRACTOR LOWER ITS EMPLOYMENT
STANDARDS? IF THE OUTGOING CONTRACTOR HAD UNDOCUMENTED ALIENS IN ITS
WORK FORCE, BUT THE SUCCESSOR CONTRACTOR STRICTLY ABIDES BY U.S.
IMMIGRATION LAWS, ARE THOSE EMPLOYEES GUARANTEED CONTINUED EMPLOYMENT
UNDER THIS BILL? COULD A MINORITY CONTRACTOR BE FORCED TO INHERIT AN
EXISTING ALL-WHITE WORK FORCE? OR ONE WHICH SPEAKS A LANGUAGE WHICH
NONE OF ITS SUPERVISORS ARE CONVERSANT IN?
THERE ARE ALSO COMPLICATED ISSUES REGARDING BASIC TERMS OF EMPLOYMENT
WHICH THE BILL RAISES BUT LEAVES UNADDRESSED. MUST THE NEW CONTRACTOR
4
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PAY THE SAME WAGES AS THE PREVIOUS ONE? CAN IT REQUIRE THAT DIFFERENT
HOURS BE WORKED? CAN IT ASSIGN ADDITIONAL LOCATIONS TO THE INHERITED
EMPLOYEE? MUST IT MAINTAIN ANY OTHER BENEFITS THE PRIOR EMPLOYER HAD
PROVIDED? MOREOVER, WHILE THE FUNDAMENTAL QUESTION OF FEDERAL
PREEMPTION MAY HAVE BEEN SETTLED, THE BILL STILL RAISES SERIOUS QUESTIONS
AND CONFUSION ABOUT OTHER ASPECTS OF LABOR LAW. WHEN AN EMPLOYER'S
WORK FORCE IS COMPRISED OF FIFTY PERCENT OR MORE OF UNIONIZED EMPLOYEES
FROM THE PRIOR EMPLOYER, FEDERAL LAW USUALLY REQUIRES THAT THE NEW
EMPLOYER RECOGNIZE AND BARGAIN WITH THAT UNION, EVEN THOUGH THE NEW
EMPLOYER HAS BEEN NON-UNION. IN SOME INSTANCES, THE NEW EMPLOYER MAY
EVEN BE OBLIGED TO ACCEPT THE PRIOR EMPLOYER'S CONTRACT WITH THE UNION. BY
ENACTING BILL 19-12, THE COUNCIL COULD BE FORCING THOSE COUNTY SERVICE
PROVIDERS WHO HAVE CHOSEN TO BE NON-UNION INTO THESE VERY CIRCUMSTANCES.
IT WOULD SEEM HIGHLY INAPPROPRIATE FOR THE COUNCIL TO TAKE SUCH AN ACTIVE,
AGGRESSIVE ROLE IN DETERMINING PRIVATE SECTOR LABOR-MANAGEMENT
RELATIONSHIPS.
A RELATED AREA WHICH THE BILL SIGNIFICANTLY CONFUSES IS WHAT IMPACT THE
COUNCIL INTENDS IT TO HAVE ON THE EMPLOYMENT AT WILL DOCTRINE. THE BILL
WOULD CLEARLY MAKE THAT DOCTRINE INAPPLICABLE TO INHERITED EMPLOYEES IN
THE FIRST NINETY DAYS UNDER A NEW CONTRACTOR; WHAT IS ITS APPLICABILITY
THEREAFTER? AND WHAT OF THE NEW CONTRACTOR'S OTHER EMPLOYEES-IS
EMPLOYMENT AT WILL STILL APPLICABLE TO THEM-SO THAT TWO PERSONS DOING
IDENTICAL WORK FOR THE SAME EMPLOYER AT THE SAME SITE WILL HAVE TWO
ENTIRELY DIFFERENT SETS OF RULES GOVERNING THEIR EMPLOYMENT RIGHTS?
5
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EVEN IF ALL THESE ISSUES COULD SOMEHOW BE DEALT WITH, THE COUNCIL SHOULD
HAVE GRAVE DOUBTS ABOUT TAKING A STEP WHICH FEW OTHER LEGISLATURES HAVE
TAKEN: MANDATING THAT PRIVATE EMPLOYERS MUST HIRE CERTAIN PERSONS WHOM
YOU, AS LAWMAKERS, HAVE DEEMED TO BE ESPECIALLY ENTITLED TO PROTECTION
FROM THE DYNAMIC ECONOMIC ACTIVITY THAT IS AT THE HEART OF OUR SYSTEM OF
GOVERNMENT. THE MAY 11, 2012 STAFF MEMORANDUM SPEAKS OF PROTECTING
SELECTED WORKERS FROM "SUDDEN UNEMPLOYMENT." IF THIS IS THE ELIGIBILITY
STANDARD TO BE USED FOR JOB SECURITY, -THEN SURELY BILL 19-12 IS ONLY THE
BEGINNING. THE COMPETITIVE BID PROCESS IS HARDLY THE MAIN CAUSE OF INNOCENT
LOSS OF JOBS. THOSE WHO LOSE THEIR JOBS WHEN THEIR EMPLOYER GOES OUT OF
BUSINESS, OR CLOSES A STORE OR BRANCH, ARE WITHOUT FAULT AND HAVE NO
NOTICE; SHOULD THEY NOT BE PROTECTED? WHAT ABOUT WORKERS NOT COVERED BY
THIS BILL, BUT WHO LOSE THEIR JOB DUE TO A LOST CONTRACT? WHO WOULD SEEM
ENTITLED TO PROTECTION? WHERE, AND ON WHAT RATIONAL BASIS, WILL THE POLICY
END?
AOBA RECOGNIZES THAT SOME WORKERS ARE INEVITABLY DISPLACED AS A RESULT
OF CONTRACTS LOST IN COMPETITIVE BIDDING. NO RELIABLE EVIDENCE HAS BEEN
PRESENTED, HOWEVER, AS TO THE NET NUMBER OF WORKERS AFFECTED. HOW MANY
ARE NEITHER RETAINED BY THE NEW CONTRACTOR, NOR PLACED IN OTHER LOCATIONS
BY THEIR PRESENT EMPLOYER? OF THIS NUMBER, HOW MANY HAVE OTHER FULL-TIME
JOBS AND ARE, THUS, NOT PRtMARILY DEPENDENT ON THE JOB FROM WHICH THEY
HAVE BEEN DISPLACED? AND FOR THOSE WHO ARE DISPLACED, HOW LONG HAS THE
DISPLACEMENT TYPICALLY LASTED?
FINALLY, WHO ARE THEY BEING DISPLACED BY? IF A CLEANING CONTRACTOR, FOR
EXAMPLE, HAS D.C. RESIDENTS IN ITS WORKFORCE, THIS BiLL COULD EASILY
6
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"DISPLACE" MONTGOMERY COUNTY CITIZENS IN NEED OF WORK BY MANDATING THE
RENTENTION OF NON·RESIDENT WORKERS. WHO IS TO SAY WHICH OF THEM IS IN
GREATER NEED OF THE JOB IN QUESTION?
UNLESS THE COUNCIL CAN ANSWER THESE QUESTIONS, IT CANNOT BE CERTAIN THAT
BILL19·12 IS THE MOST APPROPRIATE MEANS OF MINIMIZING THE TYPE OF
DISPLACEMENT IT SEEKS TO ADDRESS. THE COUNCIL SHOULD NOT TAKE THE
EXTRAORDINARY STEP OF INSERTING THE COUNTY GOVERNMENT INTO PRIVATE
CONTRACTS AND WORKPLACES IN THE MANNER THIS BILL WOULD REQUIRE.
THANK YOU AGAIN FOR THE OPPORTUNITY TO BE HERE THIS AFTERNOON AND YOUR
CONSIDERATION OF AOBA MEMBERS' VIEWS. I WILL BE HAPPY TO ANSWER ANY
QUESTIONS.
7
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CHAMBER OF COMMERCE
SILVER
SPRING
GREATER
June 8, 2012
Council President Roger Berliner
and Members of the Council
Montgomery County Council
100 Maryland Avenue
Rockville, Maryland 20854
Re: Bill 19-12, Human Rights and Civil Liberties Displaced Service Workers
Dear Council President Berliner and Members of the Council:
On behalf ofthe Greater Silver Spring Chamber of Commerce and our more than 400 member businesses, I am
writing to express our opposition to Bill 19-12, Human Rights and Civil Liberties Displaced Service Workers.
This letter is submitted in lieu of testimony for the June 12 public hearing on this matter.
Among our Chamber member businesses are companies that provide security, janitorial, and building
maintenance services, as well as those business and building owners that rely on contactors to provide these
services. Our members oppose Bill 19-12 as it is written for the reasons I outline below. Please also know that
in addition we find that the language of the bill to be unclear and leave many unanswered questions.
Our first, and perhaps most important, concern is that while the staff memo indicates that Bill 19-12 would
"require certain contractors to retain certain service workers for a 90-day transition period," the language in the
bill does not make this clear. References to the "successor contractor" in lines 139 to 141 and 150 to 163
include a specific reference to a 90 day transition period. However, language in lines 142 through 149 say that
the "successor contractor must give each affected service employee a written offer of employment. ..." and
includes no reference to employment for only 90 days. We hope this is merely an oversight in the drafting of
the bill and does not intentionally require "successor contractors" to permanently hire a "terminated
contractor's" employees.
More generally, while the Bill states that it "does not limit the ability of an awarding authority to terminate a
service contract or replace a contractor with another contractor," we beg to disagree.
According to one of our member companies that provides commercial cleaning services, the most common
reasons a building owner or manager will put a cleaning or maintenance contract out for bid are I) poor
performance on the part of the current contractor (that is directly related to the performance of the contractor's
employees); 2) the desire of the building owner or manager to seek cost savings for the service (particularly in
the current economy that sees commercial vacancy rates in Montgomery County climbing to more than 25
percent); and 3) a change in building ownership or management (wherein the new owner or manager desires to
retain the services of a contractor with whom they have had a positive service experience).
Bill 19-12 makes it difficult for a building or business owner ("awarding authority") to replace a poorly
performing contractor with a better one because the new contractor would be required to keep the previous
contractor's employees for 90 days, despite the fact that the awarding authority may not have been happy with
8601 Georgia Avenue, Suite 203, Silver Spring, Maryland 20910
Phone: 301-565-3777 • Fax: 301-565-3377 • info@gsscc.org • \Vww.gsscc.org
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GSSCC Comments Re: Bill 19-12, Human Rights and Civil Liberties Displaced Service Workers 2
the job perfonnance of the fonner contractor's employees. Bill 19-12 makes it impossible for the "awarding
authority" or the "successor contractor" to assure the best possible service with the most qualified workers. Not
only does the Bill allow the County government to tell a contractor whom it must hire, it also requires
preference by seniority. This is wrong. Preference should be determined by job perfonnance, not seniority.
Furthennore, the County government should not
be
involved in telling a business whom it must hire, especially
in a private business-to-business contract.
The provisions of the Bill also raise a host of unanswered questions:
Lines 123 through 137 lay out a series of requirements for the "awarding authority." Does the I5-day timeframe
in line 123 relate to the actual contract tennination date, or to the notice oftennination date? How would the
"awarding authority" know the names, dates of hire, and other details about a "tenninated contractor's"
employees? Aren't there privacy issues associated with this? What if the "tenninated contractor" provides
incorrect infonnation to the "awarding authority" and the new contractor, or refuses to provide any infonnation
at all? Are their penalties against the "terminated contractor" for refusing to provide this infonnation, or for
providing incorrect infonnation? Are there penalties against the "awarding authority" for not getting the
infonnation to provide to the new contractor?
It
seems that this Bill (particularly in lines 125 to 137) is inappropriately putting the "awarding authority" in the
middle of an employer/employee relationship. In a sense, this defeats some of the purpose of using a contractor
for certain services. Companies rely on contractors to perfonn certain services and rely on the contractor to
handle all personnel matters. The "awarding authority" has no direct relationship with the contractor's
employees and should not have such a relationship. Likewise the "awarding authority" should have no
relationship with a "collective bargaining unit for a contractor's employees." That relationship should remain
between contractor employer and its employees, not the business (awarding authority) that hired the contractor.
If, indeed, the "successor contractor" is required to retain the "tenninated contractor's" employees, even for just
90 days, at what wage and benefit scale must those employees be retained? That of the "tenninated contractor,"
even though the new contractor bid on and won the job based on its own wage and benefit parameters? Further,
if the "tenninated contractor's" employees were working under a collective bargaining agreement, does the Bill
require that that agreement and the provisions thereof transfer to the "successor contractor"? If-so, is this only
for the 90 days, or does that 90 days of paying employees represented by a collective bargaining agreement
suddenly place the "successor contractor" in the position of negotiating a collective bargaining agreement for all
if its employees?
The Bill allows a "successor contractor" to retain less than all the previous contractor's employees during the 90
day period if the "successor contractor finds that fewer service employees are required to perform the work than
the tenninated contractor had employed," but what ifone ofthe unneeded service employees disagrees with that
decision? Would that unneeded employee have the right to file a complaint with the county? Who decides how
many of the workers are needed if there is a dispute on the part of an "affected employee"?
Lines 157 through 161 refer to the hiring of any employees not retained. Does this apply only to the 90 day
period, or is the intent that the "successor contractor" may hire no new employees into its company (for any
contract) until all ofthe "tenninated contractor's" employees have been offered employment?
Line 162 says that a "successor contractor" must not discharge a service employee retained under this Section
without "just cause" during the transition period." Who defines 'Just cause"?"
With regard to other definitions in the Bill: Lines 112 to 118 are confusing in tenns of the definition of a
"contractor" versus the "awarding authority." In lines 112 to 114, it appears that the definition of "contractor" is
being expanded to include a new property owner, who would be more rightly be defined as an "awarding
authority," that would typically employ the contractor. Is this the intent? Likewise in lines 115 to 118, it
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GSSCC Comments Re: Bill
19-12,
Human Rights and Civil Liberties Displaced Service Workers-3
appears that the definition of "contractor" is being expanded again to include a company that chooses to use
direct employees instead of an outside contractor for certain services. Is this also the intent of the bill?
Finally, we are compelled to ask: Why does the Bill exempt all government agencies from its requirements? If
indeed, the Council is concerned about workers displaced as a result of a change in outside contractors, should
not also the County take steps to protect workers displaced as a result of a change in County government
contracts?
The Greater Silver Spring Chamber of Commerce believes that businesses - and individuals - should be free to
choose and contract with whichever companies they believe can best provide the necessary services. We oppose
any legislation that would restrict, make this more challenging, or insert County government philosophy and
will into what are rightly private contracts. Likewise, we believe that any and all companies should be able to
hire whichever employees they choose based on their ability to perform the necessary jobs and we
oppose legislation that would restrict this.
For these reasons, we urge the Council to reject Bill 19-12.
We appreciate the opportunity to express our concerns in this matter.
Sincerely,
Jane Redicker
President
@
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March 9, 2012
Dear Montgomery County Councilmember:
I am writing to express my support for Displaced Worker Protection legislation in Montgomery County
As a cleaning contractor with accounts in Maryland, I know that this legislation will help to improve.
standards for workers, and create stability for our clients who are commercial property owners.
My company also operates in Washington DC, where similar legislation has been in place for many
years, and with much success. The legislation has not caused any disruption to- the cleaning contractor
community, nor been a financial burden to the DC government. I credit this legislation with he/ping
responsible contractors like ours stay competitive, while at the same time providing fair wages and
benefits toour employees.
OUf
industry is very competitive, and contracts are generally written with very short termination notice
requirements. In the absence of Displaced Worker protection janitors and other service employees
could get caught in turmoil when contracts change at facilities. Displaced Worker legislation allows usto
compete
Oli
the quality of our services without hurting employees - something aU responsible
contractors are pleased to do. In addition, most responsible contractors typically look to keep the
employees who know their buildings and the tenants. It saves on hiring and training. and makes sense
from a security perspective;
In addition, the law still allows us the flexibilitY to make personnel decisions that we need to stay
competitive- including terminating employees for just. cause and being responsive to clients concerns
and bidding specifications.
SiZ
{d /
V
Genee. Nguyen
President, BSMI
Forthese reasons, I urge you to support Displaced Worker Protection legislation in Maryland.
Cc: Ike Leggett, Montgomery County Executive
BUILDING SERVICE MANAGEMENT, INC.
6101 Arlington Blvd.. Falls Church.VA 22044
Tel:
(703)
538-3611 • Fax: (703) 538-3617
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Total
Quality
GS-42 Certified Green Cleaning
3619
Fourteenth Street, N.W.
March
2, 2012
Washington, D.C. 20010
202-722-2240
FAX
202-722-1670
www.TotaIQualityBuildinqServices.com
Dear Montgomery County Councilmember
I am writing to express my support for Displaced Worker Protection legislation in Montgomery County
As a cleaning contractor with accounts in Maryland, I know,that this legislation will help to improve
standards for workers, and create stability for our clients who are commercial property owners.
My company also operates in Washington DC, where similar legislation has been in place for many
years, and with much success. The legislation has not caused any disruption to the cleaning contractor
community, nor been a financial burden to the DC government.
J
credit this legislation with helping
responsible contractors like ours stay competitive, while at the same time providing fair wages and
benefits to our employees.
Our industry is very competitive, and contracts are generally written with very short termination notice
requirements. In the absence of Displaced Worker protection janitors and other service employees
could get caught in turmoil when contracts change at facilities. Displaced Worker legislation allows us to
compete on the quality of our services without hurting employees - something all responsible
contractors are pleased to do. In addition, most responsible contractors typically look to keep the
employees who know their buildings and the tenants. It saves on hiring and training and makes sense
from a security perspective.
In addition, the law still allows us the flexibility to make personnel decisions that we need to stay
competitive - including terminating employees for just cause and being responsive to clients concerns
and bidding specifications.
For these reasons, I urge you to support Displaced Worker Protection legislation in Maryland and I will
be happy to testify at hearings in support of the bill.
President
Cc: Ike Leggett, Montgomery County Executive
This cleaning service meets the criteria
of
the Green Sea''''
standard for Cleaning Services for reduced toxicity, waste, and exposure.
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INTEGRITY
NATIONAL CORPORATION
A Facilities
Management Company
April 13, 2.012
Dear Montgomery County Councilmember
I
am writing to express my support for the Displaced Worker Protection legislation currently
under consideration in Montgomery County. As a cleaning contractor with accounts in Maryland, I
know that this legislation will help to improve standards for workers, and create stability for our clients
in the commercial property arena.
My company also operates in Washington DC, where similar legislation has been in place for
many years. The legislation has not caused any disruption to the cleaning contractor community, nor
been a financial burden to the D.C. Government.
I
credit this legislation with helping responsible
contractors like ours stay competitive, while at the same time providing fair wages and benefits to our
employees.
Our industry is very competitive, and contracts are generally written with very short termination
notice requirements. In the absence of Displaced Worker protection janitorial personnel and other
service employees could get caught in the turmoil when contracts change at facilities. The Displaced
Worker legislation allows us to compete on the quality of our service without hurting employees,
something all responsible contractors are pleased to do. in addition, most responsible contractors
typically look to keep the employees who know their buildings and the tenants. It saves on hiring and
training expense and this consistency tends to enhance overall security at a buildng •
In addition, the law still allows us the flexibility to make personnel decisions that we need to
stay competitive, including terminating employees for just cause and being responsive to clients
concerns and
bidding
specifications.
For these reasons, I urge you to support the Displaced Worker Protection legislation in Maryland ..
Sincerely,
INTEGRITY NATIONAL CORPORATION
cc: Ike Leggett, Montgomery County Executive
@
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(
m
"
·.·',····:I·:·
:;
.~.
;j
':
:
7421 Washington Boulevard
Elkridge, MD 21075
T
(4W) 579-8300
F
(4W) 579-1250
infoVilexecutivemaintenance.net
www.executivemaintenance.net
Dear Montgomery County Councilmember,
I am writing to express my support for Displaced Worker Protection legislation in
Montgomery County As a cleaning contractor with accounts in Maryland, I know that
this legislation will help to improve standards for workers. and create stability for our
clients who are commercial property owners.
My company also operates in Washington DC, where similar legislation has been in place
for many years, and with much success. The legislation has not caused any disruption to
the cleaning contractor community, nor been a tinancial burden to the DC government. I
credit this legislation with helping responsible contractors like ours stay competitive,
while at the same time providing fair wages and benefits to our employees.
Our industry is very competitive, and contracts are generally written with very short
termination notice requirements. In the absence of Displaced Worker protection janitors
and other service employees could get caught in turmoil when contracts change at
facilities. Displaced Worker legislation allows us to compete on the quality of our
services without hurting employees - something all responsible contractors are pleased to
do. In addition, most responsible contractors typically look to keep the employees who
know their buildings and the tenants.
[t
saves on hiring and training and makes sense
from a security perspective.
In addition, the law still allows us the tlexibility to make personnel decisions that we
need to stay competitive - including terminating employees for just cause and being
responsive to clients concerns and bidding specifications.
For these reasons, I urge you to support Displaced Worker Protection legislation in
Maryland and I will be happy to testify at hearings in support of the bil1.
Sincerely,
Cc: lk;
~mery
Co nty Executive
~
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1'15/12
Nondisplacement of Qualified Workers Under Service Contracts
I
The White House
ContfH't Us
Search WhitoHouse.gov
For Immediate Release
January 30,2009
EXECUTIVE ORDER
NONDISPLACEMENT OF QUALIFIED WORKERS UNDER SERVICE CONTRACTS
When a service contract expires, and 11 follow-on contract is awarded for the same sef'Ace, a\ the same
location, the successor contractor or its subcontractors often hires the majorilyofthe predecessor's emplo)'ees,
On some o(ocasiorls, however,
11
successor contractor or its subcontractors hires
a
new work force, thus
displacing the predecessor's employees.
The Federal Government's procurement interests in economy and efficiency are served when the successor
conlractorhires the predecessor's employees.
A
carryover work force reduces disruptIon to the delivery of
services during the period of trans ition between contractors and provides the Federal Government the benefits of
an experienced and trained work force that is familiar wilh the Federal Government's personnel, facilities, and
requirements.
Therefore. by the authorityvested in me as President by the Cons titution and the laws of the United States of
America, including the Federal Propertyand Administrative Services Act,
40 U.S.C. 101
etseq., and in orderto
promote economy and efficiency in Federal Government procurement, it
is
hereby ordered as follows:
Section
1.
Policy. It is the policy of the Federal Government that service contracts and soliCitations for such
contracts shall include a clause that requires the contractor, and its subcontractors, under a contract that
succeeds
a
contract for performance of the same or sirnilar services at the
same
location, to offer those
employees (other U1an managerial and supervisory emplo)'ees) em plo)'ed under the predecessor contract
whose employment will be terminated as
a
reSult of the award of the successor contract.
a
rightof first refusal of
ernployrnent under the contract in positions for which they are qualified. There sha!1 be no employment openings
under the contract until such right of first refusal has been provided. Nothing in this ordershall be construed to
permit a contractor or subcontractor to fail to complywith any provision of any other Executive Order or law of the
United States.
JUly
04,201:: 1:39
Pf,;1
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July 05, :2012 2:0g PM
EuT
From the Archives: President Obarna
Travels to Russia, Italy, and Ghana
Check out a photo gallery from President
Obama's
2009
trip to Russia, Italy, and Ghana.
,h;iy
!;S.
~;~H;.
"!":
:5";
AJ,,1
Fourth of .Jul,.
ilt
the White House
President Obama
welcomes
servicemem bers and their
families to the White
House on Independence
Day.
£-:'OT
Sec.
2..
DefinItions.
(a) "SerVl<:e contract" Qr "contract" rne3ns any contract or subcontract for services entered into by the Federal
Govemmentor its contractors that;s covered byttle Sef\1Ca Contract Act of
1965,
as amended, 41 U.S.C.
351
at
seq" and its Impiemenling regulations.
(bj "Emplo)'ee" means a service employee as defined in tha Service Contractl>ct of 1965, 41 U.S.C. 35'7(b).
Sec.
3.
Exclusions. This order shall not apply to:
(a) contracts or subcontraCts under the simplified acquisition threshold as defined in 41 U.S.C. 403;
(b) contracts or subcontracts awarded pursuant to the Ja,its-Wagner-O'DayAct, 41 U.S.C.4648c;
(c) guard, elevator operator, messenger, or custodial services provided
to
the Federal Government under
contracts or subcontracts Ith sheltered workshops employhlg the severely handicapped as described in
section 505 of the Treasury, Postal Services and General GovernmenUlppropriations Act, 1995, Public Law 103­
President Obama Salutes New American
Citizens
The Pres ident lold the
m ilitary service members
who took the oath of
citizenship today at the
White House that f.'.merica
is bound together not only by ethnicity and
bloodlines, but by fidelity to a set
I1f
ideas
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agreements for vending facilities entered inlo pursuantto the preference regulations issued underlhe
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!\ct,
20 U.S.C.I07; or
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(e)
employees who were hired to work under a Federal service contract and one or more Il0nfederal service
contracts as part of a Single job. provided that the emplo)'ees were not deplo)'ed in a manner that was designed
to avoid the purposes oftllis order.
www.whitehouse.gov/the-press-office/nondisplacement-qualified-workers-under-service-contracts
6]J
1/3
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lis/12
Nondisplacement of Qualified Workers Under Service Contracts
I
The White House
Sec.4. Authority to Exem pt Contracts,
If the head of a contracung department or agency nnds that the application of any of the requirements of this order
would not serve the purposes of this order or would impair the ability of the Federal Government to procure
services on an economical and efficient basis, the head of such department or agency may exempt its
department or agency from the requirements of any or all ofthe provisions of this order with respect
to
a
particular contract. subcontract. or purchase order or any class of contracts, subcontracts, or purchase orders.
Sec, 5, Contract Clause. The following contract clause shall be included in solicitations for and service
contracts that succeed contracts for perfonmance of the same or similar work at the same location:
"NON DISPLACEMENT OF QUALIFIED WORKERS
"(a) ConSistent with the efficient performance of this contract, the contractor and its subcontractors shall,
except as other.vise pro\'ded herein, in good faith offer those employees (other than managerial and supel'visory
employees) en,ployed under the predecessor contract whose emplo)<fl,ent will be terminated as a result of
award of this contract or the expiration of theeon tract under Which the employees were hired, a right of first refusal
of emplOyment under this contract in positions for wl,ich employees are qualified. The contractor and its
subcontractors shall determine the number of employees necessary for effiCient performance of this contract and
may elect to employ fewer employees than the predecessor contractor
emplo~'ed
in connection with performance
of the work, Ex(.'€pt as provided in paragraph (b) there shall be no
emplo~nentopening
under this contract, and
the con tractor and any subcontractors shall not offer employment under this contract, to any person prior
to
having complied fully with this obligation. The contractor and its subcontractors shall make an express orfer or
employment to each employee as provided herein and shall state the time within which the employee must
accept such offer, but in no case shall the period within which the employee must accept the offer of employment
be less than 10 days.
"(b) Notwithstanding the obligation under paragraph (a) above, the contractor and any subcontractors (1) may
employ under this contract any employee who has worked for the contractor or subcontractor for at least
3 months im mediately preceding the commencement of this contract and who would otherwise face lay-off or
discharge, (2) are not required to offer a right of firs t refusal
to
any employee(s) of the predecessor contractor
who are not sel'\lice employees within the meaning of the Service Contract Act of 1965, as amended, 41 U.S.C.
357(b), and (3.1 are not required to offer a right of first refusal to any em p !oyee(s) of the predecessor contractor
whom the contractor or any of its subcontractors reasonably believes, based on the particular employee's past
performance, has failed to perform suitablyon the job.
"(c) In accordance with Federal Acquisition Regulation 52222-41{nl, the contractor shall, not less
than 10 days before com pletion of this contract, furnis
11
the Contracting Officer a certified list of the names of all
serJice employees working under this contract and its subcontracts during the last month of contract
performance. The lis t shall also contain anniversary dates of em ployment of each sel'\liee em pJoyee under this
contract and its predecessor contracts either with the current or predecessor contractors or their subcontractors.
The Contracting Officer will provide the list to the successor contractor, and the list shall be provided on request
to employees or their representatives,
"(d) If it is determined, pursuant
to
regulations issued by the secretary of Labor (Secretary). that the contractor
or its s ubcontraClors are not in compliance wllh ttle requirements of this clause or any regulation or order of the
Secretary. appropriate sanctions may be im posed and remedies invoked against the contractor or its
subcontractors, as provided in Executive Order (NO,) ____, the regulations. and relevant orders afthe
Secretary. or as othervvise prol,ided by law.
"(a)
In every s ubcontract entered into in ordeno perform sel'\lices under this contract, the contractor will include
proviSions that ensure that each subcontractor
",.11
honor the requirements of paragraphs
(8)
through (b) with
respect to tile emplo>'''HlS of a predecessor subcontractor or subcontractors working under this contract, as weil
as of a predecessor contractor and its subcontractors. The subcontract shall also include prol,isions to ensure
that the subcontractor will provide the contractor with the information about th employees of the subcontractor
needed byti1e contractor to complywith paragraph 5(c), above. The contractor will take such action with respect
to any such subcontract as may be directed by the Secretary as a means of enforcing such provisions, including
the imposition of sanctions for non-compliance, provided. however. that if the contractor, as a result of such
direction, becomes inVOlved in litigation with a subcontractor, or is threatened witl1 such inllO!vement, the
contractor may request that the United Stales enter into such litigation to protect the interests of the
United Slales"
Sec. G. Enforcement
(a)
The Secretary of Labor (Secretary) is responsible for investigating and obtaining
compliance with this order. [n such proceedings, the Secretary shall have the
alJthOri~/to
Issue final orders
prescribing appropriate sanctions and remedies, including, but not limited to, orders requiring employment and
payrnentofwages lost. The Secretary also may pro\<ide that where a contractor or subcontractor has failed to
com piywi!h any order of the Secretary or has corn m itt&d willful "'lolatlons of this onler or the
regula~ons
issued
pLlrsuant thereto, the contractor or subcontractor, and its responsible offi('ers, and any firm in which the contractor
or subcontractor has a substantial interest, shall be ineligible to be awarded any contract of the United States for
a period of up to 3 years. Neither an order for debarment of any contractor or subcontractor from further
www,whitehouse.gov/the-press-office/nondisplacement-qualified-workers-under-service-contracts
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ii5112
Nondisplacement of Qualified Workers Under Service Contracts
I
The White House
Government contracts under this section nor the inclusion of a contractor or Sllbcontractor on a published list of
noncomplying contractors shall be carried out without affording the contractor or sllbcontractor an opportunity for
a
hearing,
(b)
This order creates no rights under the Contract Disputes Act, and disputes regarding the requirement of
the contract clause prescribed bysection
5
of this order, to the extent permitted bylaw, shall be disposed of only
as provided
by
the Secretary in regulations issued under this order. To the extent practicable, such regulations
shall falKlr the resolution of disputes
by
effiCient and informal alternative dispute resolution methods, The
Secretary shall, in consultation with the Federal Acquisition RegulatoryCouncil, issue regulations, within
180
days of the date of this order,
to
the extent permitted bylaw, to implement the requirements of this order, The
Federal kQuisition RegulataryCauncil shall issue, within
180
days afthe date of this order, to the extent
permitted bylaw, regulations in the Federal Acquisition Regulation to provide for inclusion olthe contract clause
in Federal solicitations and contracts subj8ctto this order,
Sec, 7, Revocation, Executive Order 13204 of February 17, 2001,
is
revoked,
Sec,
8,
Severability,
If
any pro,ision of this order, or the application of such provision or amendment to any
person or
circums tance, is held to be invalid, the remainder of this order and the application of the prOVisions of such to any
person or circumstances shall not
be
affected thereby,
Sec,
g,
General ProviSions,
(<3)
Nothing in this order shall be construed to impairor other\.'Jise affect;
(i) authority granted by law
to
an exeeutive department, agency, or tl1e head thereof; or
(ii) functions or the Director of the Office of Management and Budget relating to budgetary, administrative, or
legislative proposals,
(bi
This order shall be implemented consistent with applicable law and subject to the ;availability of
appropriations,
{cj This order is not intended to, and does not, create any right or benefit, substantive or procedural,
enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its
officers, employees, or agents, or any other person, This order is notintended, however, to preclude judicial
review affinal decisions by the Secretary in accordance with the Administrative Procedure Act.
5
U,S,C,
701
et
seq,
Sec, 10, Effective Date, This order shall become effective immediately and shail apply to solicitations issued
on or after the effective date for the action taken by the Federal Acquisition RegulatoryCouncii under section
6(b)
of this order,
SARACK
OBAIV1A
THE WHITE HOUSE,
January 30,2009,
En espo!jol : AcoossibWty
~ Gopyli:~ht Inf(j~atiGn
l;SA.qov
i
Priv1:I';Y Pt)licy
i
Ct)ptact
!
SubSCribe 10 RSS Focds
i
!~,pply
for
a ,Jeb
www,whitehouse,govlthe-press-officelnondisplacement-qualified-workers-under-service-contracts
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MONTGOMERY COUNTY COUNCIL
ROCKVILLE:, MARYLAND
VALERIE ERVIN
COUNCILMEMSER
DISTRICT
5
Memorandum
Roger Berliner, Council President
George Levewpaj, HHS Committee Chair
Valerie Ervir'f,1ID Committee Chair
July 16,2012
Bill 19-12, Human Rights and Civil Liberties - Displaced Service
Workers
To:
From:
Date:
Subject:
As you know, I sponsored Bill 19-12 along with Councilmembers Rice, EIrich,
Riemer and Navarro to enact a modest, temporary mechanism to provide stability to a
sector that already operates on thin financial margins and workers who lives can be
irreparably harmed by even short-term income interruptions. County Executive Leggett
has also issued a letter of support for this bill. Similar laws are already enacted in the
District of Columbia, San Francisco, Los Angeles, Providence and New York City.
The goal of this bill is to provide notice to, and temporary employment for,
service workers who are subject to'unemployment due to their employer's loss of a
service contract. Contracted security, cleaning and other property service industries are
subject to rapid contractor turnover with little or no notice to employees.
Concerns have been raised about why County Government was exempt from the
introduced version of the bill. The County's Living Wage Law reduces a contractor's
motivation to replace their workforce with entry-level employees. In addition, the
County's existing procurement process ensures that there will be sufficient notice before
a contractor change. However, I am proposing an amendment to expand this legislation
to include County Government. The attached version of this bill makes the necessary
changes to apply this bill to Montgomery County. This will be yet an additional
protection to the County's existing laws, policies and practices. I have discussed this
issue with the County Executive and his staff and they support this amendment.
c:
Councilmembers
County Executive Isiah Leggett
Kathleen Boucher, Assistant Chief Administrative Officer
Marc Hansen, County Attorney
David Dise, Director Department of General Services
Bob Drummer, Council Legislative Attorney
Amanda Mihill, Council Legislative Attorney
Attachment
STELLA B. WERNER OFFICE BUILDING
100 MARYLAND AVENUE, ROCKVILLE, MARYLAND 20850
TTY
240/777-7914
240/777-7960 OR 240/777-7900
FAX
240/777-7989
WWW.MONTGOMERYCOUNTYMD.GOV/COUNCIL
<!~
PRINTED ON RECYCLED PAPER
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Page 1 of 1
Drummer, Bob
From:
Boucher, Kathleen
Thursday, July 26,20129:05 PM
Faden, Michael; Drummer, Bob
Ervin, Valerie; Healy, Sonya; Dise, David
E.;
Jones, Pam; Stowe, James
L.;
Adler, Joseph;
Nurmi, Joy; Melnick, Richard; Federman-Henry, Karen; Kassiri, Fariba
Displaced Workers Bill
Sent:
To:
Cc:
Subject:
Mike,
Attachments:
Displaced Service Workers - Bill 19-12.doc
I am following up on our conversation today. As you know, the CE supported the introduced version of this bill,
which did not apply the bill to the County, because he felt that existing Living Wage and Procurement Laws
already provided the intended protections to employees of County contractors. However, he has since made it
clear that, if the Council feels that it is necessary to make this bill applicable to the County in order to insure that
the intended protections in the bill extend to employees of County contractors, he would support
that change. DGS and OCA staff will be present at Monday's workession to discuss existing laws and the types
of notice and protections that already exist for employees of County contractors. They will also be prepared to
speak to how the County can comply with the bill if it is amended to apply to the County.
DGS and OCA staff have carefully reviewed the procurement law to understand clearly how the bill could be
integrated with that law. They have proposed a couple of clarifying amendments as well as amendments
that eliminate a potential conflict with State law by clarifying that a successor contractor must extend an offer of
employment to employees of the terminated contractor. The attached amendments do the following:
(1)
substitute references to "offer of employment" for references to "retain" in several places; (2) clarify
that the awarding authority must ensure that a terminated contractor conspicuously posts notice of the
contract termination to its employees; (3) where the County is the awarding authority, define
"terminated" and "cancelled" in a manner consistent with the procurement law and to
exclude emergency procurements or direct purchases; and (4) add some language at the end of the bill
that seems to have been inadvertently omitted in the introduced version of the bill.
DOS and OCA staff have a question about the meaning of 27-65(a)(1) and (2). These 2 paragraphs
seem to be either redundant or inconsistent in the context ofthe County as an "awarding authority" -­
and would appreciate the opportunity to talk to the Committee about the intent of this part of the bill and
to clarifY that intent. They are also open to discussing the intent behind their proposed amendments and
any alternative amendments that might achieve the same goals.
Best regards,
Kathleen
7/27/2012
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Att!rrneys at
Lctw
3 Bethesda
Melro
Center, Suile 460
Belhe.do, MD
20814·5367
W\vw.lerchearly.
com
Tel. (301) 841·3829
Fox 1301) 347-1783
wKo!l)iners@lerchecrly.com
William Komi"e!"s
Julv
18,2012
"
.
VIA
FEDERAL EXPRESS
Ms. Patty Vitale
Chief of Staff
Office of Councilmcmbcr George Leventhal
Stella B. Wemer Office Building·
100 Maryland Avenue
Rockville,MD
20850
Re:
Bill No. 19-12
Dear Ms. Vitale:
In accordance with previous discussions, I enclose a number of questions
and
interpretations issues rcgarding
Bill
No. 19-12
for
consideration during the Committee
work session on
July
26. I offe'! these as possible lines of inquiry or clarification in the
review of Bill No. 19-12.
Please contact me if you have any questions on these materials.
Thank
you for your consideration ofthis
materiaL
V
cry
truly yours,
LERCH
EARLY
&
BREWER,
CHTD.
William
Kominers
WK/lyn
Enclosure
cc:
Ms.
Jane
Redicker
12070K:I
OS908.0() I
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BILL NO. 19-12
Questions and Interpretations
1. Must the Terminated Contractor release the employees from their individual
contracts if the New Contractor wants
to
hire them? Can the Terminated
Contractor refuse and continue to use them at other jobs?
2. The Legislative memo suggests that the New Contractor must tlquicldy recruit new
employees.
n
But the New Contractor would be expected to already have his own
employees to begin with and would therefore not need the other employees.
3. Do the I1carryover employees" bring with them their status as union/nonunion
workers to the New Contractor? Does the New Contractor have to accept those
employees in that status? Does the number of union employees that are hired by
compulsion ofBil119-12, cause the New Contractor to become unionized, even if
they are previously nonunion? How does this affect other, ongoing costslbusiness
of that New Contractor?
4. Must the carryover employees be hired at levels of salary and benefits that are
identical to what they receive from the Terminated Contractor? Wouldn't this
retrospectively affect the bid price in the New Contractor's proposal to the
Awarding Authority? Could this then make that proposal either more expensive
for the Awarding Authority or uneconomical for the New Contractor?
5. If the carryover employees must be retained, even ifjust for 60 for 90 days, at
what wage and benefit scale? The New Contractor presumably won the bid based
on using its own existing wage and benefit scale. Using the wages and benefits
scale of the Terminated Contractor may radically alter the economic basis on
which the New Contractor won the contract.
6.
If
the Terminated Contractor's employees work under collective-bargaining
agreement, does the Bill require that such agreement and its provisions be
transferred to the New Contractor lock, stock, and barrel? If so, is this only
effective for the 90 days? How is this affected in the event that the New
Contractor desires to retain some ofthose carryover employees beyond 90 days?
7. Does paying those employees who are represented by a collective-bargaining
agreement suddenly place the New Contractor in the position of requiring a
collective-bargaining agreement for all of its employees, not just those that are
carryover from the prior contractor?
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8. What happens after the 90 day period? Can the New Contractor release the
employee without cause?
9. When the New Contractor dismisses the carryover employee
within
90 days, for
cause, is that dismissal subject to grievance procedures? If so, which grievance
procedures apply?
10.
If
the New Contractor dismisses the carryover worker at the end of 90 days (or
after 90 days) without cause, is that dismissal subject to grievance procedures? If
so, which grievance procedures apply?
11. What qualifies as
under this Bill?
'~ust
cause" for discharge of the service employee retained
12. Who defines that "just cause" term?
13. Lines 123 through 124. The Awarding Authority must give 15 days notice before a
service contract is terminated. Does this mean 15 days before the date when that
contractor will actually cease work, or does it mean 15 days before the date in the
contract by which notice to tenninate is required to be given to the contractor?
14. By providing notice to the service workers 15 or more days before the old contract
is terminated, how does the Awarding Authority prevent retaliation at the job site?
What is to prevent those workers -- who know they are being terminated -- from
damaging the business or removing material (''theft'') from the business?
15. Has the Bill considered the risk that food preparation workers who have been
advised of termination may retaliate in preparation of food? How is this risk
avoided under this Bill?
16. How does an office building prevent theft, damage or other disruption by
disgruntled workers in the time between their notice of termination and actual
vacating ofthe building? Those service workers Ganitorial, maintenance, etc.) are
inherently in the building when none ofthe tenants or owners are present.
17. Lines 128 through 130. The Awarding Authority is required to give the New
Contractor a complete list of each service employee, including name, date of hire
and job classification. How would the Awarding Authority obtain this
information? Is this information not subject to privacy restrictions while in the
hands of the Tenninated Contractor? How does the Awarding Authority get this
information? What happens if the Terminated Contractor refuses to provide the
information? What penalty? What is the penalty for the Awarding Authority's
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failure to get the information? What is the penalty for the Awarding Authority's
failure to give the information?
18. By providing personal data on each service employee to the Awarding Authority, .
does the Terminated Contractor breach privacy requirements that it owes to the
individual service employees? lfthe Awarding Authority is able to obtain the
private information on each service employee and then provides that personal data
to the New Contractor, does the Awarding Authority breach privacy obligations to
those service employees?
19. Lines 131 through 133. The Awarding Authority is supposed to unotify the
collective-bargaining representative
II
of the affected service employees about the
pending termination of the contract. How does the Awarding Authority: (i) know
who the employees are, and (2) obtain collective-bargaining information so as to
give the notice required under the Bill?
20. What happens if the Terminated Contractor provides incorrect information about
the employees to the Awarding Authority and/or the New Contractor? Or what if
Terminated Contractor refuses
to
provide any information at all? Are there any
penalties against the Terminated Contractor for refusing to provide this
information or for providing incorrect information?
21. The Awarding Authority has no direct relationship with the employees of either
contractor. Yet this Bill seeks to create a relationship where one does not, and
should not, exist.
22. Similarly, the Awarding Authority should have no relationship with the
"collective-bargaining unit for a contractor's employees," yet this Bill creates a
similar relationship.
23. Lines 142 through 145. The New Contractor is required to give a written offer of
employment to each service employee and send a copy to their collective­
bargaining representative. How does the New Contractor obtain that information
on each employee? Does the New Contractor breach privacy obligations to those
potential employees by passing such information on to third parties?
24. The New Contractor is required to retain employees by "seniority." Does this not
impair the ability of the New Contractor to hire for his or her company and
thereby affect whether the company can provide services to customers in the most
effective manner possible? Why should the obligation to retain by seniority trump
the obligation to hire or retain employees by "capability" or "qualifications"?
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25.
In
applying this Bill to private schools, is the New Contractor authorized to require
background checks on the carryover workers? Will failure of a background check
be sufficient cause for dismissal or non-retention?
26.
In
those facilities that include day care on the premises (private school, etc.) can
the offer of employment be delayed pending necessary background investigation?
27. Application of this Bill to security service seems short-sighted. Selection of
security services and the qualifications for the workers, such as bonding, should
override the considerations in the Bill. This would apply whether those security
workers are employed in a hospital, museum, airport, music hall, or residential
building. Application of this Bill to security staff in these particular locations, as
well as to the others set forth in Section 27-64 (a) in the definition offlservice
contract," seems even more egregious than for janitorial services.
28. As to security services, there are many concerns with the clearances and
background information on these employees. Will the New Contractor be able to
conduct background investigations ofthe carryover workers? Will the results of
these background investigations satisfy the "just cause" for either: (i) terminating
an employee within the 90 day period or (ii) not hiring them at all?
29. The most common reasons that a building owner or manager will put a cleaning or
maintenance contract out for bid are: (i) poor performance on the part ofthe
current contractor (that is directly related to the performance of the contractor's
employees),
(ii)
the desire of the building owner or manager to seek cost savings
for the service, (iii) a change in building ownership or management (whereby the
new owner or manager wishes to retain a services contract or with whom they had
a previous and positive experience). How does this Bill allow the owner the right
to operate the building in an economical manner of his or her choosing?
30. Why should a building or businelss owner (or "awarding authoriti') want to keep
the previous contractor's employees, if the reason why the contract may have been
terminated is unhappiness with the performance of the former contractor's
employees? The Bill allows the County government to tell the contractor what
employees to hire. Similarly, the County government is being allowed to tell the
property owner who to hire. The County should not intrude into these business
decisions of the owner.
31. If the New Contractor decides that fewer employees are required to perform the
work, (and therefore hires only some of the carryover employees) is that decision
subject to challenge by the carryover employees (or, particularly, by one of those
who was not carried over to the new company)? Would that unneeded employee
have the right to file a complaint with the County? How the decision made as to
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the appropriate number of employees
ifthere
is a dispute on this issue by an
affected employee? How does this decision ripple through the contract with the
Awarding Authority?
32. If during the 90 day period the New Contractor wishes to hire additional
employees for other contracts
it
has, (not the one taken over with this Awarding
Authority), may that New Contractor hire new employees for its other work who
are not members of the carryover employee group? That is to say, may the New
Contractor hire other employees for its company, or is it limited to only hiring new
employees for its company from the pool who are of the terminated employees
unless and until all of those employees have been offered employment? lfso, how
long does this restriction remain in place (i.e., for how long is the New Contractor
restricted in
is
choice of employees for work at other sites)?
33. Is an Awarding Authority that undertakes these same types of services with its
own forces (Le., its own employees) classified as a "contractor" for purposes of
this Bill? How would that classification affect its ,ability to hire and discharge its
service employees who are direct employees of the Awarding Authority?
34. Why does the Bill exempt all government agencies from these requirements?
35. What has actually occurred over time in the District of Columbia and New York
City after similar legislation was enacted? What has been the effect on the
Awarding Authorities? The contractors? The employees?
36. Why does the local government (Le. County government) not lead by example on
this issue?
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Many of the questions raised and addressed below relate to a misunderstanding of the scope of
Bill 19-12 as well as the way in which service contracting actually works. To be perfectly clear,
the Bill would do the following:
Bill 19-12 will provide a 90 day transition period in which incumbent service workers are to be
offered the opportunity to remain on the job by new contractor. The new contractor will
determine appropriate staffing levels and is not required to retain more employees than are
needed. Moreover, the new contractor will have the power to terminate incumbent employees
for cause. Finally, Bill 19-12 does not set any required standards with regard to wages and
benefits to be offered to incumbent workers.
This is not a significant departure from the normal practice in service contracting. Due to the
slim financial margins in the industry, service contractors cannot afford to retain a standing
workforce between contracts. They have to recruit workers once they have won a contract, and
the norm is to retain the incumbent workers. The proposed legislation merely enshrines this
norm and ensures continuity of services and smooth transition. It also protects against bad-actor
motivations for firing the entire incumbent workforce in order to eliminate seniority or get rid of
a union.
Question 1:
Must the Terminated Contractor release the employees from their individual
contracts if the New Contractor wants to hire them? Can the Terminated
Contractor refuse and continue to use them at other jobs?
Bill 19-12 applies to the employees of contractors. Generally, service employees do not sign
individual employment contracts with the contractors. Most workers in these industries are
direct employees of the contractors, not independent contractors. In nearly all of these jobs, it
would be illegal to classify employees as independent contractors.
Bill 19-12 requires the successor contractor to offer employment to the employees. If the
predecessor contractor wished to retain some or all of the predecessor employees, it could
certainly offer the incumbent employees positions at another work site. If an employee has two
competing job offers (i.e. one from each contractor), it would be within the employee's
discretion which offer to accept. Neither contractor would violate the offer and retention
provisions of Bill 19-12 in this situation.
Moreover, in the few instances where contracted service employees have signed employment
contracts with their employers that contained non-compete clauses, these clauses have been
found invalid, unenforceable and against the public interest in several states. Thus, it is likely
that the predecessor contractor would be unable to enforce such a clause.
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Question 2:
The Legislative memo suggests that the New Contractor must "quickly recruit
new employees." But the New Contractor would be expected to already have his
own employees to begin with and would therefore not need the other employees.
The service contract industries affected by Bill 19-12 are not structured in a way that the
question pre-supposes. The financial margins in these service industries preclude, by and large,
service contractors from having a large staff on hand that is not performing work on a particular
contract. Rather, service contractors generally retain the incumbent employees.
Questions 3- 7
3.
Do the "carryover employees" bring with them their status as union/nonunion
workers to the New Contractor? Does the New Contractor have to accept those
employees in that status? Does the number of union employees that are hired by
compulsion of Bill9-12, cause the New Contractor to become unionized, even if
they are previously nonunion? How does this affect other, ongoing costslbusiness
of that New Contractor?
Must the carryover employees be hired at levels of salary and benefits that are
identical to what they receive from the Terminated Contractor? Wouldn't this
retrospectively affect the bid price in the New Contractor's proposal to the
Awarding Authority? Could this then make that proposal either more expensive
for the Awarding Authority or uneconomical for the New Contractor?
If the carryover employees must be retained, even ifjust for 60 for 90 days, at
what wage and benefit scale? The New Contractor presumably won the bid based
on using its own existing wage and benefit scale. Using the wages and benefits
scale of the Terminated Contractor may radically alter the economic basis on
which the New Contractor won the contract.
If the Terminated Contractor's employees work under collective-bargaining
agreement, does the Bill require that such agreement and its provisions be
transferred to the New Contractor lock, stock, and barrel? If so, is this only
effective for the 90 days? How is this affected in the event that the New
Contractor desires to retain some of those carryover employees beyond 90 days?
Does paying those employees who are represented by a collective-bargaining
agreement suddenly place the New Contractor in the position of requiring a
collective-bargaining agreement for all of its employees, not just those that are
carryover from the prior contractor?
4.
5.
6.
7.
Bill 19-12 does not pre-empt existing Federal labor law. Under the National Labor Relations
Act, if the existing employees are covered under a collective bargaining agreement, the new
contractor must agree only to bargain in good faith with the union. Wages, benefits and terms of
employment would be subject to bargaining between the union and the employer as set forth in
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existing federal law. Bill 19-12 does not set any requirements about wages and benefits of the
new contractor.
Question 8:
What happens after the 90 day period? Can the New Contractor release the
employee without cause?
Bill 19-12 imposes no requirements on the contractor after the transition period.
Questions 9- 10
9.
When the New Contractor dismisses the carryover employee within 90 days, for
cause, is that dismissal subject to grievance procedures? If so, which grievance
procedures apply?
If the New Contractor dismisses the carryover worker at the end of90 days (or
after 90 days) without cause, is that dismissal subject to grievance procedures? If
so, which grievance procedures apply?
10.
A dismissal within 90 days would only be subject to a grievance procedure if the new contractor
has agreed to a collective bargaining agreement with the union.
Questions 11-12
11.
What qualifies as 'just cause" for discharge of the service employee retained
under this Bill?
Who defines that 'just cause" tenn?
12.
"Just cause" in the employment context is defined and interpreted by arbitral, state and Federal
labor law. Bill 19-12 does not define or change this. In essence, it means that the contractor
must have a substantiated reason for firing an employee, for example, absenteeism, stealing, poor
perfonnance, etc.
Question 13: Lines 123 through 124. The Awarding Authority must give 15 days notice before
a service contract is tenninated. Does this mean 15 days before the date when that
contractor will actually cease work, or does it mean 15 days before the date in the
contract by which notice to tenninate is required to be given to the contractor?
15 days before work on the contract transitions to a new contractor.
Question 14-16
14.
By providing notice to the service workers 15 or more days before the old contract
is terminated, how does the Awarding Authority prevent retaliatiol?- at the job site?
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What is to prevent those workers
--
who know they are being terminated
--
from
damaging the business or removing material ("theft") from the business?
15.
Has the
Bill
considered the risk that food preparation workers who have been
advised of termination may retaliate
in
preparation of food? How is this risk
avoided under this Bill?
How does an office building prevent theft, damage or other disruption by
disgruntled workers in the time between their notice of termination and actual
vacating of the building? Those service workers (janitorial, maintenance, etc.) are
inherently in the building when none of the tenants or owners are present.
16.
These are odd, hypothetical questions and insulting to the workers. Has there ever been a
documented case in which a worker who was given advance notice of the termination of a
service contract "retaliate [d] in the preparation of food"? Most service workers have been
present on the job site for many years, and have worked for numerous contractors. There is no
reason why they would want to sabotage their worksite, or the successor contractor.
Questions 17-20,23.
17.
Lines 128 through 130. The Awarding Authority is required to give the New
Contractor a complete list of each service employee, including name, date of hire
and job classification. How would the Awarding Authority obtain this
information? Is this information not subject to privacy restrictions while in the
hands of the Terminated Contractor? How does the Awarding Authority get this
information? What happens if the Terminated Contractor refuses to provide the
information? What penalty? What is the penalty for the Awarding Authority's
failure to mthe information? What is the penalty for the Awarding Authority'S
failure to give the information?
By providing personal data on each service employee to the Awarding Authority,
does the Terminated Contractor breach privacy requirements that it owes to the
individual service employees? If the Awarding Authority is able to obtain the
private information on each service employee and then provides that personal data
to the New Contractor, does the Awarding Authority breach privacy obligations to
those service employees?
Lines 131 through 133. The Awarding Authority is supposed to "notify the
Collective-bargaining representative" of the affected service employees about the
pending termination of the contract. How does the Awarding Authority:
(i)
know
who the employees are, and (2) obtain collectivebargaininginformation so as to
give the notice required under the Bill?
18.
19.
20.
What happens if the Terminated Contractor provides incorrect information about
the employees to the Awarding Authority and/or the New Contractor? Or what if
Tenninated Contractor refuses to provide any information at all? Are there any
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penalties against the Terminated Contractor for refusing to provide this
information or for providing incorrect information?
23.
Lines 142 through 145. The New Contractor is required to give a written offer of
employment to each service employee and send a copy to their collective­
bargaining representative. How does the New Contractor obtain that information
on each employee? Does the New Contractor breach privacy obligations to those
potential employees by passing such information on to third parties?
The Awarding Authority would simply get the list of employees and the collective bargaining
representative from the previous contractor. If the workers are covered by a collective
bargaining agreement, the union representative will already have the information. Penalties for
violations are discussed in Section 27-8. No specific penalties are prescribed in Bill 19-12; they
are at the discretion of the Director of the Office of Human Rights. No private information is
required - only name, date of hire and job classification - so privacy concerns are unwarranted.
Questi ons 21-22
21.
The Awarding Authority has no direct relationship with the employees of either
contractor. Yet this Bill seeks to create a relationship where one does not, and
should not, exist.
Similarly, the Awarding Authority should have no relationship with the
"collective-bargaining unit for a contractor's employees," yet this Bill creates a
similar relationship.
22.
Bill 19-12 only requires the Awarding Authority to interact with entities with which a contractual
relationship already exists, or which it intends to enter into a contractual relationship with.
It
is a
mis-reading of the Bill to state that it creates a relationship between the Awarding Authority and
contracted employees or their representative.
Question 24
24.
The New Contractor is required to retain employees by "seniority." Does this not
impair the ability of the New Contractor to hire for his or her company and
thereby affect whether the company can provide services to customers in the most
effective manner possible? Why should the obligation to retain by seniority trump
the obligation to hire or retain employees by "capability" or "qualifications"?
As set forth above, the successor contractor is free to reduce the unit, or to discharge an
employee for just cause. Retaining the incumbent employees, who usually know the building,
the service and the customers well, often increases the level of service at the work site.
Seniority at a work site means that the employee has experience.
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Questions 25-26, 28
25.
In applying this Bill to private schools, is the New Contractor authorized to require
background checks on the carryover workers? Will failure of a background check
be sufficient cause for dismissal or non-retention?
Inthose facilities that include day care on the premises (private school, etc.) can
the offer of employment be delayed pending necessary background investigation?
As to security services, there are many concerns with the clearances and
background information on these employees. Will the New Contractor be able to
conduct background investigations of the carryover workers? Will the results of
these background investigations satisfy the "just cause" for either: (i) terminating
an employee within the 90 day period or (ii) not hiring them at all?
26.
28.
Bill 19-12 does not create or eliminate any requirements for background checks. Failure to pass
a background check could be considered "just cause." Indeed, one reason to retain incumbent
employees is that it is likely that they have already successfully passed background checks. This
can·save the successor employee time and money.
Question 27: Application of this Bill to security service seems short-sighted. Selection of
security services and the qualifications for the workers, such as bonding, should
override the considerations in the Bill. This would apply whether those security
workers are employed in a hospital, museum, airport, music hall, or residential
building. Application of this Bill to security staff in these particular locations, as
well as to the others set forth in Section 27-64 (a) in the definition of "service
contract," seems even more egregious than for janitorial services.
Many nationally recognized security experts have stated an opinion contrary to the one posed in
the question. High turnover among private security officers is a leading cause of concern about
the protection offacilities
i.
Bill 19-12 would have the effect of reducing turnover, and thus
could be an important factor in improving security. Indeed, retaining security officers who are
already familiar with the building, the tenants, and the regular customers is as important, if not
more, than retaining employees in other service industries.
It
helps to ensure that the security
officers on guard already know who is supposed to be on the premises and who is not, increasing
security for everyone.
Questions 29 and 35.
29.
The most common reasons that a building owner or manager will put a cleaning or
maintenance contract out for bid are: (i) poor performance on the part of the
current contractor (that is directly related to the performance of the contractor's
employees), (ii) the desire ofthe building owner or manager to seek cost savings
for the service, (iii) a change in building ownership or management (whereby the
new owner or manager wishes to retain a services contract or with whom they had
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a previous and positive experience). How does this Bill allow the owner the right
to operate the building in an economical manner of his or her choosing?
35.
What has actually occurred over time in the District of Columbia and New York
City after similar legislation was enacted? What has been the effect on the
Awarding Authorities? The contractors?The employees?
A study of the impact of similar legislation on other markets conducted by a leading real estate
economist concluded that:
;;There was not a single instance where a senior real estate manager, owner, or investor
mentioned the Displaced Worker Protection as a factor in building investment, pricing, or
operations.
Moreover, the cities covered by such laws have been amongst the most robustly performing
office markets over the long period ofmy study. They have achieved higher levels ofpricing
per square foot, a higher ratio ofprice to net income, and stronger volumes ofcapitalflow.
u"
Question 30: Why should a building or business owner (or "awarding authority") want to keep
the previous contractor's employees, if the reason why the contract may have been
terminated is unhappiness with the performance of the former contractor's
employees? The Bill allows the County government to tell the contractor what
employees to hire. Similarly, the County government is being allowed to tell the
property owner who to hire. The County should not intrude into these business
decisions of the owner.
Federal, state and local law regulate employee-employer relations extensively, many to a degree
far exceeding the very modest scope of this legislation. There is no legal question or concern
raised; it is speculation and a biased statement of opinion.
Questions 31-32
31.
If
the New Contractor decides that fewer employees are required to perform the
work, (and therefore hires only some of the carryover employees) is that decision
subject to challenge by the carryover employees (or, particularly, by one of those
who was not carried over to the new company)? Would that unneeded employee
have the right to file a complaint with the County? How the decision made as to
the appropriate number of employees if there is a dispute on this issue by an
affected employee? How does this decision ripple through the contract with the
A warding Authority?
If during the 90 day period the New Contractor wishes to hire additional
employees for other contracts it has, (not the one taken over with this Awarding
7
32.
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Authority), may that New Contractor hire new employees for its other work who
are not members ofthe carryover employee group? That is to say, may the New
Contractor hire other employees for its company, or is it limited to only hiring new
employees for its company from the pool who are of the terminated employees
unless and until all of those employees have been offered employment? If so, how
long does this restriction remain in place (i.e., for how long is the New Contractor
restricted in is choice of employees for work at other sites)?
Bill 19-12 does not hamper a contractor's ability to downsize or to hire as needed. The decision
to downsize is at the discretion of the contractor, based on the specifications of the service
contract. Bill 19-12 does not affect work at a contractors other worksites.
It
concerns only the
work site( s) where there was a change in contractors.
Question 33: Is an Awarding Authority that undertakes these same types of services with its
own forces (i.e., its own employees) classified as a "contractor" for purposes of
this Bill? How would that classification affect its ability to hire and discharge its
service employees who are direct employees of the Awarding Authority?
In the event an Awarding Authority transitions a service contract from a service contractor to
employing the workers as direct employees, Bill 19-12 would apply.
Questions 34, 36
34.
36.
Why does the Bill exempt all government agencies from these requirements?
Why does the local government (i.e. County government) not lead by example on
this issue?
Bill 19-12 has been amended to include Montgomery County contractors. Federal Government
contractors are covered by an Executive Order signed by President Obama in 2009, which offers
similar protections to displaced service contract workers.
iCongressional Research Service Report for Congress "Guarding America: Security Guards and U.S.
Critical Infrastructure Protection". November 12,2004.
ii
Memo
to SEIU 328J from Hugh Kelly, Ph.D., CRE.Clinical Associate Professor of Real Estate at New York
University; February 13, 2012.
8
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Amendment I to Bill 19-12
By Councilmember Leventhal
Purpose: revise Bill to only require notice of termination or expiration of applicable contracts.
1) Replace lines
122-167
with:
~7-65.
Required
notice.
W
At least
90
days before a service contract is scheduled to expire or term!nate, the
terminated contractor must notify each service employee in writing that the
contract either:
ill
ill
is scheduled to end on a specific date: or
has been terminated as of a specific date.
ill
The terminated Gontractor also must:
ill
notify the collective bargaining representative, if any, of the affected
service employees of the pending expiration or termination of the service
cpntract; and
ill
assure that a written notice describing the penciing expiration or
termination of the service contract and the employee rights provided by
this Article is conspicuously posted at each affected work site.
Lru
A service e.l1,ll.110yee who was npt notified a§ required l:>Y this Section may file a
complai l1t with the Director under Section 27-7.
2) Delete lines 108-118:
[[Successor contractor
means
£!
contractor that:
ill
is awarded
£!
service contract to provide. in whole or in part, services that
are substantially similar to those provided at any time during the previous
90
days;
ill
has purchased or acquired control of
£!
property located the County
where service employees were employed at any time during the previous
90
days; or
ill
terminates
£!
service contract and hires service employees as its direct
employees to perform services that are substantially similar, within
90
days after
£!
service contract is terminated or cancelled.]]
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Amendment 2 to Bill 19-12
By Councilmember Leventhal
Purpose: exempt homeowners' associations, condominiums, and housing cooperatives from law.
1) Amend lines 66-69:
Awarding authority
means any person that awards or enters into
service contract or subcontract with
~
~
contractor to be performed in
~
the County.
Awarding authority
does not include
Federal, State,
County, or municipal government. or a common ownership
community, as defined in Section 10B-2Cb).
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Amendment 3 to Bill 19-12
By Councilmember Leventhal
Purpose: remove security employees from law.
1) Amend lines
78-81:
Service contract
means
f!
contract between an awarding authority and
f!
contractor to provide [[security,]] janitorial, building maintenance,
food preparation, or non-professional health care services in
located in the County which is used as a:
2) Amend lines 90-95:
~
facility
Service employee
means an individual employed on
~
full or part-time
basis
Qy
~
contractor as a:
ill
building service employee, including
f!
janitor, [[security
officer,]] groundskeeper, door staff, maintenance technician,
handyman, superintendent, elevator operator, window cleaner,
or building engineer;
3) Amend lines 101-104:
Service employee
does not include:
ill
ill
f!:
managerial or confidential employee;
an employee who works in an executive, administrative,
st;:curi1Y,. or professional capacity;
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Amendment 4 to Bill 19-12
By Councilmember Leventhal
Purpose: remove restrictions on employee termination during 90-day transition period.
1) Amend lines 150-161:
ill
Each
successor contractor may retain less than all of the
affected service employees during the 90 day transition period
if the successor contractor[
[~]]
[[®]]
finds that fewer service employees are required to
perform the work than the terminated contractor had
employed;
[[ill.}
retains service employees hy seniority within each job
classification;
(g
maintains
£!
preferential hiring list of those employees not
retained; and
ill}
hires any additional service employees from the list, in
order of seniority, until all affected service employees
have been offered employment;]]
F:\LAW\BILLS\1219 Human Rights-Displaced Service Workers\GL Amendment 4.Doc