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Labor Law - Interview: Kentucky Labor Cabinet provides insights for employers

Kentucky Employment Law Letter, Vol. 20, No. 7
May 2010

This month, Kentucky Employment Law Letter (KELL) is pleased to roll out a special feature, an interview with David O’Brien Suetholz, general counsel of the Kentucky Labor Cabinet. Before assuming his current role in state government, Suetholz practiced law with Segal, Stewart and Cutler, representing labor organizations and employees. As you know, the Labor Cabinet’s jurisdiction extends to virtually all aspects of an employer’s relationship with, and obligation to, its employees. We are pleased that the Commonwealth’s chief law enforcement officer for labor and employment matters agreed to accept our invitation for an interview. We believe you’ll find his comments open and informative.

— Richard S. Cleary, Editor

KELL: Tell KELL readers about your background and how you came to be general counsel to the Kentucky Labor Cabinet. 

Suetholz: I am originally from northern Kentucky. I use my middle name, “O’Brien,” to distinguish myself from my dad, who is an elected official in northern Kentucky and may not always agree with my philosophy. Plus, my mom wanted me to have her maiden name so the world would know I’m Irish. 

I went to college at Villanova University and attended law school at Notre Dame. In law school, I clerked for the United Mine Workers of America, which inspired me to practice labor law. I was blessed to get a position with the then Segal, Stewart, Cutler law firm in Louisville, which at the time was the premier union-side labor firm in Kentucky. After a year, that firm split, and necessarily, I had to shoulder responsibilities typically not afforded to second-year associates. In fact, the case that I conducted my first deposition [on] alone will likely be heard by the United States Supreme Court this fall to consider whether third parties are protected from retaliation under Title VII [of the Civil Rights Act of 1964]. I have successfully practiced before our Kentucky Supreme Court as well as the Sixth [U.S.] Circuit [Court of Appeals, which covers Kentucky] in its typical three-judge capacity as well as its en banc capacity. I regularly read theKentucky Employment Law Letter when I was employed at the Segal law firm and am honored to now be interviewed by such a publication. 

KELL: Tell KELL readers a little bit about your duties as general counsel and the work in your office. For which laws does the Labor Cabinet have responsibility? 

Suetholz: Currently, I have 12 dedicated staff members in the office of the general counsel. We have responsibility for enforcing Kentucky’s wage and laws, KRS 338; child labor laws, KRS 339; and workers’ compensation [laws], KRS 342. Our office also advises the secretary of labor on labor management issues and collective bargaining rights for public workers, KRS 67A and C; and 345 (collective bargaining rights for certain police officers and firefighters). 

KELL: What is a typical day like in your job? 

Suetholz: A typical day in my job begins with a meeting with the leadership of the cabinet, either Secretary J.R. Gray or his deputy, Mark Brown, and Commissioner Mike Dixon. I then return several phone calls and e-mails and make rounds to answer specific questions from our attorneys and division directors regarding individual cases. I only get quiet time in my office late in the day. 

KELL: As general counsel, do you have any particular goals or enforcement focus for 2010? 

Suetholz: We are very proud of our occupational safety and health state plan. Recently, the federal [Occupational Safety and Health Administration] praised our plan in its audit for our willingness to pursue willful citations against employers who flagrantly put workers’ health and safety in jeopardy. I intend to uphold that tradition in my tenure. 

I also hope to make 2010 the year of confronting employee misclassification. Every citizen in the Commonwealth is harmed when an employee is erroneously classified as an independent contractor or groups of employees are treated as subcontractors without having the requisite autonomy and discretion to act as such. Our cabinet recently settled a large case with a construction contractor that resulted in over a $300,000 recovery, the voluntary debarment of that contractor for public work in Kentucky, and a specific agreement that if the contractor were to obtain public work after the debarment, that it could not use subcontractors on that project for the next three years. That case, plus one other, resulted in over $1.8 million in wages for workers and well over $300,000 in taxes to state and local entities. Misclassification will be a focus for the cabinet in 2010. 

KELL: In your view, what are the problem areas in terms of violations of the law for which the Labor Cabinet has responsibility? 

Suetholz: As I stated above, employee misclassification is a major problem area in terms of violating the law. We have also witnessed a rash of fall-protection violations where employees are not properly tied off or guarded in construction settings, roofing, bricklaying, etc. 

KELL: What violations by employers do you most frequently see? 

Suetholz: Without a question, the majority of occupational safety and health violations concern workers who are not properly afforded fall protection for the hazards of their workplaces. These violations primarily occur in the construction industry. It is difficult to pinpoint any one specific recurring violation of the wage and hour laws. In my short time at the cabinet, we have seen numerous prevailing wage violations, unlawful restaurant tip pooling, and of course, overtime violations. 

KELL: What tips can you offer Kentucky employers to avoid violating the law? 

Suetholz: The overwhelming majority of Kentucky’s employers follows the law and has no occasion to interact with the Kentucky Labor Cabinet. I welcome phone calls from employers and their representatives when there is ambiguity or just confusion as to what the requirements of our laws are. I occasionally answer questions based on hypotheticals and have no problem with maintaining the anonymity of employers who call with questions. This is a service that I believe Governor [Steve] Beshear has instilled in each of the cabinets of his administration. 

At the Kentucky Labor Cabinet, we would rather be proactive in assisting our Commonwealth’s employers in properly complying with the law than ... entering into an adversarial situation where we have to prosecute for violations. 

KELL: What do you see as the primary obstacle to smooth labor management relations in Kentucky? 

Suetholz: The primary obstacle, from my perspective, in labor management relations right now in 2010 is the very real and powerful impulse to demand radical concessions due to the economic environment. I have seen firsthand employers who have had to plea poverty and open their books to their bargaining units to justify demands for necessary concessions. However, the obstacle is when profitable employers demand concessions merely because the entity down the street obtained them. Such demands sow the seeds for future unrest. They also erode the quality of our communities. I believe the demand for unnecessary concessions in 2010 is the primary obstacle to smooth labor management relations. 

KELL: If an employer has been targeted for an investigation, what advice can you give it? 

Suetholz: The Kentucky Labor Cabinet has a statutory duty to “foster, promote, and develop the welfare of both wage earners and industries in Kentucky,” and we at the cabinet respect the vital role that Kentucky’s employers play in our communities. For the employers who run afoul of the law in good faith, I can personally assure you that our cabinet is not out to exact the proverbial “pound of flesh” just because an employer violated one of the laws we have to enforce. Open and honest dialogue with cabinet personnel is my advice for employers who acted in good faith and are targeted with an investigation. 

KELL: What are the two or three most important legal issues that you see confronting Kentucky employers over the next five to 10 years and beyond? 

Suetholz: I believe the two most important legal issues that will be confronted by Kentucky employers over the next five to 10 years will be the issue of employee misclassification and possibly the implications from the government’s action or inaction on immigration reform. Some commentators have predicted that nearly half of the new jobs created in 2010 will be independent contractor positions. States around the country have already formed task forces to confront employee misclassification because of the severe impact this violation has on tax revenues. If these predictions are correct, employers will likely see stricter legislation with respect to classification of their employees. 

The second legal issue Kentucky’s employers will face is the looming question of what to do with thousands of undocumented workers. At the Labor Cabinet, we have seen a sharp increase in the number of immigrant workers seeking assistance from the cabinet for primarily wage and hour violations. In two recent cases, the cabinet recovered nearly $1.8 million in unpaid wages for immigrant workers who came from throughout the South to find work in Kentucky. Currently, this workforce tends to be transient, but with immigration reform, employers will be able to adjust and count on a more stable workforce. Immigration reform should also lessen the burden on employers who feel pressured to slash costs and reduce wages because of their competitors’ ability to underpay immigrant workers. 

[The] Kentucky Labor Cabinet stands ready to assist any of Kentucky’s employers if they have questions over misclassification.

If you have any questions or need help, please contact any member of the Greenebaum Doll & McDonald Labor and Employment Department.

Copyright 2010 M. Lee Smith Publishers LLC 
KENTUCKY EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Kentucky employment law.  Questions about individual problems should be addressed to the employment law attorney of your choice.

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