New York Law Review

Tag: Joint Employer

  • Ovadia v. Office of the Indus. Bd. of Appeals, 19 N.Y.3d 138 (2012): Determining Joint Employer Status of a General Contractor for Subcontractor’s Employees

    Ovadia v. Office of the Indus. Bd. of Appeals, 19 N.Y.3d 138 (2012)

    In the typical general contractor/subcontractor context, a general contractor is not an employer of its subcontractor’s employees under the Labor Law unless the contractor exercises direct control or functional supervision over the employees.

    Summary

    This case addresses whether a general contractor, HOD Construction Corp., acted as a joint employer of masonry workers employed by its subcontractor, Well Built Construction Corp., thus owing them unpaid wages. The New York Court of Appeals held that HOD was not a joint employer during the period Well Built was on the job, as the relationship reflected a typical contractor/subcontractor arrangement. However, the court remitted the case to determine if HOD became an employer for the six days after Well Built abandoned the project, based on a disputed promise of payment to the workers.

    Facts

    HOD was hired as a general contractor for a construction project and subcontracted the masonry work to Well Built. Well Built employed the masonry workers, supervised them, and initially paid their wages. After about three months, Well Built’s principal, Bruten, abandoned the job without paying the workers. The workers then approached HOD’s owner, Ovadia, demanding payment. There was conflicting testimony about whether Ovadia promised to pay the workers if they finished the job. The workers continued working for six more days before HOD hired a new subcontractor. The workers were not paid for these six days or for a portion of the prior three months.

    Procedural History

    The New York State Department of Labor (DOL) determined HOD was a joint employer and ordered them to pay the unpaid wages, penalties, and interest. The Office of the Industrial Board of Appeals (the Board) upheld the DOL’s order. HOD and Ovadia then initiated an Article 78 proceeding to annul the Board’s ruling. The Appellate Division confirmed the Board’s determination. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether HOD, as a general contractor, was a joint employer of Well Built’s employees during the period Well Built was actively performing the subcontract.
    2. Whether HOD became an employer of Well Built’s laborers for the six-day period after Well Built abandoned the project.

    Holding

    1. No, because the relationship between HOD and Well Built during the three-month period was a typical contractor/subcontractor relationship, lacking the requisite direct control or functional supervision by HOD over Well Built’s employees.
    2. The Court did not reach a holding on this issue and remitted the case to the Board for a determination of whether Ovadia made an enforceable promise to pay the workers for their continued work following Bruten’s disappearance and whether the workers relied on his promise by continuing to work at the construction site for the following six days.

    Court’s Reasoning

    The Court of Appeals recognized that the Labor Law defines “employer” and “employee” broadly, but also acknowledged that in the typical general contractor/subcontractor context, the general contractor is not the employer of the subcontractor’s employees. The court emphasized that general contractors primarily coordinate work and ensure projects stay on schedule, usually interacting only with the subcontractors’ principals and supervisors, not directly controlling the subcontractor’s employees.

    The Court disagreed with the Board’s reliance on factors such as HOD providing the worksite and materials, and the laborers working full-time, as these are common occurrences in construction and do not necessarily indicate a joint employment relationship. The Court noted that routine quality control inspections by the general contractor do not transform the contractor into an employer of all workers on the job site.

    The Court remitted the case to the Board to determine if Ovadia made an enforceable promise to pay the workers after Well Built abandoned the project. If Ovadia made such a promise, and the workers relied on it, HOD could be deemed an employer for that six-day period under Labor Law § 190. The Court stated, “Even in this case, an open question remains as to whether HOD became an employer of Well Built’s laborers for the six-day period after Well Built and Bruten abandoned the project.”

    The Court distinguished the typical contractor/subcontractor relationship from situations where the general contractor assumes the role of employer, emphasizing that each case depends on its specific facts.

  • New York Public Library v. New York State PERB, 37 N.Y.2d 752 (1975): Defining Public Employer Status Under the Taylor Law

    37 N.Y.2d 752 (1975)

    The Taylor Law applies only to employment that is unequivocally or substantially public; where employment satisfies some aspects of public employment but not others, the non-public aspects must be sufficiently substantial to exclude it from regulation under the Taylor Law.

    Summary

    This case addresses whether the New York Public Library (NYPL) is a “public employer” subject to the Taylor Law, which governs labor relations for public employees in New York. The Public Employment Relations Board (PERB) asserted jurisdiction over a labor dispute at NYPL, claiming the City of New York was a joint employer. The Court of Appeals held that NYPL was not a public employer under the Taylor Law because its employment structure did not meet the law’s requirements, affirming the lower court’s decision. The dissent argued that the city’s extensive control over the library’s labor relations warranted PERB jurisdiction.

    Facts

    The New York Public Library, formed from the merger of private trusts and the New York Free Circulating Library, receives substantial funding from the City of New York (approximately 80% of its operating costs). The city owns most of the books and pays most employee salaries. The union representing library employees bargains directly with the city, which determines salaries, benefits, and other terms of employment. The library is subject to city budget controls and hiring freezes.

    Procedural History

    Richard M. Brower, a library employee, challenged the enforceability of an “agency shop” agreement between the library and its union before PERB. PERB initially rejected the complaint, citing a lack of jurisdiction. Upon the City’s petition, PERB reconsidered and declared the City a joint employer with the library, asserting jurisdiction. The Appellate Division reversed PERB’s decision. The case then went to the New York Court of Appeals.

    Issue(s)

    1. Whether the New York Public Library is a “public employer” within the meaning of the Taylor Law (Civil Service Law, Article 14).
    2. Whether PERB has the authority to declare the City of New York a joint employer with the New York Public Library.

    Holding

    1. No, because the New York Public Library’s employment structure does not unequivocally or substantially meet the definition of public employment under the Taylor Law.
    2. No, because the New York Public Library is not a public employer, joint or otherwise, within the terms of the Taylor Law.

    Court’s Reasoning

    The Court reasoned that the Taylor Law applies only to employment that is “unequivocally or substantially public.” While the NYPL employment had some characteristics of public employment, it also possessed significant non-public characteristics. The court found these non-public aspects sufficiently substantial to exclude NYPL from regulation under the Taylor Law. The court did not determine whether the Taylor Law was intended to cover only employees excluded from the jurisdiction of the Labor Relations Act but focused on whether NYPL met the definition of public employer under the Taylor Law. The court emphasized that the library, unlike the city, is neither a public benefit corporation nor an agency exercising governmental power. The dissenting judge argued that the city’s overwhelming control over the library’s employee relations should make it a joint employer, aligning the library’s labor relations with those of other city employees. The dissent cited that PERB has broad discretion to determine what “would best effectuate the purposes” of the statute. The dissent highlighted the fact that the library’s employees are practically city employees, receiving the same benefits and salaries as other city employees. The dissent further argued that the legislative intent would be better effectuated by vesting jurisdiction in PERB, the agency created to deal with governmental employment’s special nature. The majority did not find this reasoning persuasive.