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Recent Changes in Delaware Employment Law

From: Delaware State Chamber Business May/June 2024 Issue

BY G. KEVIN FASIC, ESQ. AND ANTHONY N. DELCOLLO, ESQ.

IN RECENT YEARS, the Delaware General Assembly has introduced and passed legislation aimed at strengthening employee rights. While these efforts are positive for employees, some aspects create unintended consequences for small and mid-sized businesses. Increased regulatory complexity could make day-to-day operations more burdensome, potentially discouraging new business formation and impacting the growth of existing companies. These changes might make hiring decisions more challenging for employers, impacting overall workforce levels in the State. Some specific examples include:

SB 145 (signed): This new law clarifies and establishes caps on damages allowed in claims of employment discrimination. The caps exceed what is allowed under federal law. The likely result is that claimants will elect state courts to pursue these claims.

SS1 for SB 102 (signed): Contrary to decades of precedent, and federal law, this new law mandates prevailing wage rates on public works construction projects be paid to workers who fabricate custom components, regardless of where such work is performed. However, how this will be enforced when the work is performed out-of-state, by workers who never set foot in Delaware?

SB 27 (signed): This new law increases the statute of limitations for wage and other employment claims from one year to two years, changing decades of precedent.

HB 205 w/ HA3 (signed): This new law creates a state-sponsored retirement plan for employees that is to be “facilitated” by employers.

SS2 for SB1 (signed): This law, signed in 2022, creates an entirely new paid family and medical leave program that applies to employers with ten or more employees. Many employers are still unaware of this new law and its requirements. In addition to new tax burdens, this law provides for stiff penalties for noncompliance.

SB 35 (signed): This new law creates the crime of “wage theft” and subjects all Delaware employers (including owners and officers, individually) to criminal liability for various “wage violations.” For instance, improperly classifying an employee as an independent contractor is a violation.

SB 233 (pending): This Bill would establish employment protections, including mandatory employment by successor employers, for workers in the service sector.

HB 17 (pending): This Bill would mandate an hour of earned sick or safety time for every thirty hours worked by an employee, potentially conflicting with SS2 for SB 1, above.

SB 229 (pending): This Bill would allow former employees access to their former employer’s personnel file (including medical records) and expands what must be in the file.

HB 258 (pending): Overturning decades of precedent, this Bill would require domestic workers (including babysitters, housekeepers, nannies, and others) to be paid at least minimum wage.

The new laws and pending bills listed above are a sample of the efforts to protect employees from their employers. Whether they are necessary is a different question. What is clear is that employers, regardless of industry or size, have increasing regulatory obligations. Stay tuned for how these play out once enforcement begins.

G. Kevin Fasic, Esq. is managing principal of Offit Kurman’s Wilmington office and Anthony N. Delcollo, Esq. is a principal of Offit Kurman’s labor and employment practice group.

The Myth of “Green and Clean” Renewable Energy

By: Dr. David R. Legates, Advisory Board Member, A Better Delaware

Delaware is embarking on an ambitious plan to reach NetZero—zero emissions of carbon dioxide—by 2050 and reduce emissions by half by 2030.  The Legislature has already begun to propose numerous proposals to enact draconian legislation to achieve this goal including HB99, passed in 2023, which blames carbon dioxide for potentially disastrous climate change.

Some Delawareans, based on a somewhat one-sided information flow, believe that even if carbon dioxide emissions are not responsible for changes in our climate, reducing our dependence on oil, gas, petroleum, and other forms of fossil fuels will be good for the environment.

As a result, Delaware’s farmlands in Kent and Sussex Counties are being covered by solar panels. Proposals to construct offshore wind turbines and to run their new power lines through our state park or Fenwick Island to connect to the electric grid are being proposed.  We are told that, in the end, our environment will be better for the eyesores these proposals would create.

But will it be better?  Since “climate change” was still called “global warming”, media reports have told us that wind and solar—so called, renewable energy sources—are both clean and green.  The truth is, they are neither.

When one looks at a solar panel or a wind turbine, all that is evident is that they supply solar or mechanical (wind) energy to the grid, powering our homes and our businesses.
They seem to do so without producing any harmful byproducts.  Clean and green, right?

Clean energy technology requires a wide range of metals and minerals, such as aluminum, cobalt, copper, lithium, nickel, zinc, as well as rare earth minerals such as Scandium, Yttrium, Lanthanum and a host of others of which you probably have never heard and cannot pronounce.  They are largely obtained from mines in Africa, southeast Asia, and South America.

These mines are not like those for coal, with which you might be familiar.  Open pit mining must be used to extract these metals and minerals.  Such mines are considered very dangerous to both miners’ health as well as to the local ecology and hydrology because of the harmful pollutants that are produced.

Consider lithium, an important metal used in the construction of batteries for EVs.  Mining lithium causes extreme environmental damage since the extraction process requires lots of water.  The result is a toxic lake. which leads to surface- and ground- water contamination.

Diverse places such as the Democratic Republic of the Congo and Rwanda in Africa, China, Inner Mongolia, and South Korea in Asia, and Brazil and Chile in South America are plagued with pollution arising from open pit mining, done to retrieve components of renewable energy.

In addition to the environmental concerns, the mining process in these countries should also raise flags for those concerned with social justice issues.  Slave and child labor are often used by the Chinese Communist Party which owns the mines in the Democratic Republic of Congo.  Even those who willingly work in the mines suffer from extreme health hazards.

And we may not even know the true extent of the negative impact on our environment.  Italian researcher, Enrico Mariutti, examined the true carbon footprint of solar panels, wind turbines, and batteries and found that the extraction, production, and transportation associated with these so-called “green” energy technologies produce significant amounts of greenhouse gases into the atmosphere. The nature and amount of the pollution created by these mines is reported by the mining companies themselves. Mariutti asks whether we would trust car manufacturers to certify emissions from their combustion engines or pharmaceutical companies to certify the safety of their drugs. Not likely.

He wrote “we are investing hundreds of billions of dollars a year in technologies that are low carbon only because someone wrote it down somewhere … there aren’t any national or international authorities who have bothered to understand on what basis and how this ‘paper knowledge’ was assembled.”

So, next time you see a wind turbine, a large solar panel, or an electric vehicle, think about the environmental damage that was wrought to mine the metals needed for their production, the energy that went into the mining and transport of the raw materials, and the health and social consequences of the miners who extract the necessary metals and minerals.

Are wind and solar energy really clean and green energy sources, or are they simply unreliable and expensive sources of intermittent energy?

Dr. David R. Legates is an Emeritus Professor at the University of Delaware and is the Director of Research and Education at the Cornwall Alliance for the Stewardship of Creation.  He also is an Advisory Board Member of A Better Delaware.

Retail Theft Costs All of Us

 By: Dennis Godek, Advisory Board Member, A Better Delaware

Delaware residents and businesses continue to suffer from the consequences of retail theft. In 2022, the total revenue lost to retail theft in Delaware was $285,000,000.00. Nationally, retail theft losses increased by 10.5% in the same year. When combined with losses from “Return Fraud”, Delaware businesses lost a total of $547,000,000.00 in 2022. While Delaware’s retail theft per capita rate is a little lower than the average among all states, the numbers are beyond unacceptable.

The ability of retailers to reduce retail theft has been seriously impacted by their reluctance to have employees apprehend and detain suspects due to the increase in violence directed towards employees. Many retailers, including national chains, now prohibit their employees from intervening during a shoplifting. In fact, across the country, employees apprehend shoplifters only 2% of the time.  As a result, it is not unusual to see criminals casually walk into an establishment, pick up whatever merchandise they want, and walk out of the store unabated.

Organized Retail Theft Crime is a major challenge for retailers, and for law enforcement. The retail crime epidemic has led to the initiation of criminal enterprises dealing in the purchase and sale of property stolen in retail thefts. Arrests have been made in Delaware, but the activity continues. In January and March of 2024, the Delaware State Police charged individuals with Organized Retail Theft in three separate cases in New Castle County and Sussex County. One of those charged was tied to multiple thefts in three states through surveillance camera footage. Three of those charged in Sussex County were found to be in possession of over $20,000.00 worth of stolen property. All three were from New York City. In 2017, the Delaware Department of Justice civilly sued multiple individuals for Racketeering for operating a $6,000,000.00 business which purchased property stolen in retail thefts, and then sold it to individuals.

Our criminal justice system has not adapted adequately to this serious crime problem. Incidents are often not reported and the consequences fall to the employees and business owners who bear the burden of these crimes. We have seen Target and Walmart, as well as Walgreens and CVS, close multiple stores in Delaware and across the country with retail theft as the primary reason. People lose their jobs, maybe their homes, and the taxpayers see an increase in unemployment compensation along with other economic effects.

The State of Pennsylvania saw an increase in retail theft between 2021 and 2022. The Pennsylvania Legislature took definitive action and passed a law in 2024 which indicates a sea change in the approach to retail theft prosecution. The law requires the appointment of a Deputy State Attorney General and the hiring of a team of prosecutors specifically focused on retail theft throughout the state.  The law also elevates Retail Theft to a felony level crime based on the amount of value of property stolen. This includes a Class 1 Felony for property stolen valued at more than $50,000.00. Under the law in Pennsylvania, a Class 1 Felony is punishable by a prison term of up to 20 years and a fine of up to $25,000.00. In the case of the NYC thieves captured in Sussex County, under the new Pennsylvania law, they would be guilty of a Class 2 Felony and would be subject to a prison term of up to 10 years and a fine of up to $25,000.00. This is the type of commitment to addressing retail theft we must see in Delaware.

Retail Theft may be considered a “non-violent” crime, even absent physical assaults, the consequences to businesses and employees are serious and life changing. Many of them will be sentenced to probation in our courts.  While some are attempting to legislate any consequences out of violating probation, and weakening probation to near irrelevance, we must advocate for holding criminals accountable for their actions.

Advances in technology, training for employees, collaboration with law enforcement, and efforts through business associations are all contributing to the battle against retail theft, but the criminal justice system must not be able to excuse their way out of their duty to effectively prosecute these criminals.

Dennis Godek previously served as a New Castle County Police Officer and as Assistant Chief of Career Services at the Christiana Fire Company. He currently serves as Chair of the New Castle County Fire and Ambulance Advisory Board, which is the liaison between county government and the Fire/EMS service in New Castle County. Godek is a founding member of the Delaware Statewide Active Assailant Committee, which includes Law Enforcement and Fire/EM

Beware of Government’s Grab For Even More Control of Your Healthcare

By: Ben DuPont

History provides ample evidence that governments are not very proficient at managing processes and delivering services. This is not a criticism of hard-working people in government, but their efforts are often thwarted by an overwhelming tendency toward inefficiency.

A good illustration of the pitfalls of government overreach is legislation primed to be passed within the next couple days by the General Assembly. The bill’s rather innocuous title, “An Act to Amend Title 16 Of the Delaware Code Relating To Hospital Costs,” belies the extent of its sweeping power grab over how large portions of healthcare are delivered in the First State.

More bureaucracy and more cost to taxpayers. The bill establishes the new “Diamond State Hospital Cost Review Board.” It would seem that the last thing healthcare in the state and across the nation needs is yet more bureaucracy. Proponents can argue that the board is comprised of just eight members, but we know that bureaucracies always grow (the board grew just during the drafting process).  Hospitals will be required to provide reams of data to the board based solely on the whims of its members as there is no constraint on such requests apparent in the bill’s language. Who is going to review that mass of data? Certainly, it will require new analysts and data processors. The taxpayers will have to ante up for these new folks and hospitals will have to spend time and money preparing and supporting the information. Governments are good at creating and growing bureaucracies and mandates but not so good at evaluating and sunsetting them.

Shifting decisions to those the state deems as “experts.” As it stands now, all but one of the board’s members will be appointed by the governor and confirmed by the Senate.  They will wield incredible power over hospitals that will be required to submit their budgets to the board for its review and approval. The board may, in its sole discretion, deem it necessary to, “engage with the hospital in revising” its budget. Imagine being the hospital management discussing possible revisions offered by the very board that can approve – or not – your institution’s budget. Hospitals that fail to meet the budget as approved by the board face underdefined penalties under the bill.  Perhaps the most deleterious (but not really surprising) provision is that hospitals that actually outperform their budget may see the financial benefit of such confiscated, at the board’s discretion, to the state. Why would we want to take decisions about the optimal way to provide effective care in a hospital away from those who know the hospital, the patient population, the medical and other staff, and instead give those decisions to a board whose members simply cannot know such details.

Greater pressure to go along to get along. Think of the breeding ground for conflicts of interest, cronyism, and even corruption this presents. Large bureaucracies staffed by” experts” and their staff with overbearing power create huge incentives of questionable practices. How can the board’s members, if they are versed in healthcare, not have relationships and favorites across Delaware? It turns into making sure the hospital has the right friends in the General Assembly, the board or its staff, accomplished by political contributions and other means of ingratiating the hospital with the board.

Delaware should learn from the Farmers Bank debacle from half a century ago. Here was a bank 80% owned by the state, with one-third of its board members appointed by the General Assembly, a shocking lack of accountability, and the potential for conflict of interest (does any of this sound familiar?). Even the New York Times, no enemy of government meddling in the economy, reported on the resulting fiasco, with evidence of malfeasance, the not-surprising conflicts of interest, acts of cronyism, and the resulting bad loans. The Times noted how the state ended up paying dearly, $20 million a year, for this failed attempt at government meddling. It was the just one example of what one knowledgeable Delawarean refers to as the “soft corruption of political control”

But do we ever really learn? I’m reminded of something my father wrote over a decade ago, “Markets work . . . and decisions made for the many by an elite few do not.” I would rather have a committee of doctors overseeing the Delaware General Assembly expenditures than a committee of politicians overseeing our hospitals.

Navigating the Offshore Wind Minefield

By: Jane Brady, Chair, A Better Delaware

Remember the old western movies in which there’s been a drought, people are starving, the cows are dying, and the crops won’t grow? The hero would come in and “seed” the clouds to make it rain. The movie may have ended well, but the reality was, those efforts were never very successful. What is rain? It is an intermittent resource, provided by nature and which we cannot generate or control.

So, as well, are solar and wind intermittent resources. We cannot generate them; we cannot control them. When, and where, it blows or shines is outside our ability to control.

And yet, Delaware’s policy makers are feeling pretty super-human these days. In an effort to eliminate all sources of carbon dioxide (which we will not debate in this article), bills and policies are requiring our electric providers to utilize a greater and greater percentage of the power we use from wind and solar. The result is less reliable and more expensive electricity. Currently, these intermittent resources are backed up and supported by reliable sources such as coal, natural gas and nuclear power. But Delaware’s government wants that to end. To help ease the cost of compliance with these restrictive policies, the State is providing significant subsidies to the companies who provide this “green” electricity. They are putting our money where their mouth is.

Delaware used to generate much of the electricity we used here in our state. Now, because we are required by our policy makers to use an ever-expanding percentage of “green” sourced energy, we get nearly 90% of our electricity from outside the state, losing much of what we pay for as it dissipates in the distance it is transmitted. So, we are paying not just for the electricity we use, but also the electricity we lose as it travels to our state.

Recently, Senate Bill 265 was introduced to create a framework for wind farms off the coast of Delaware. There are promises of cost constraint, but we have seen how that has gone before. Additionally, there is little regard for what we, the citizens, want. As with the EV Mandate, there is a great deal of opposition to looking off our coast at 140 or so wind turbines. The Department of Natural Resources promises public hearings on the proposed regulations, but they, and the Governor, did not listen to us when they went right ahead with the EV Mandate, and they are just as focused on getting this wind farm. That was evident at an informational meeting I attended at Indian River High School this past week.

Speakers at the event confirmed the Governor’s stated intention to allow 4 large transmission cables to come ashore in our beloved state park at Three Rs beach. The Governor essentially offered that specific alternative because he can bypass public opposition and won’t need to secure the consent of any of the coastal towns that will be affected by the sight of offshore wind turbines and the transition of their beach into an industrial site.

What makes the Governor’s offer so much less palatable is that the cables that he proposes to bring ashore in our state park are for a Maryland wind farm project. And, apart from the destruction of a portion of our beautiful coast, the cables are intended to go to the old Indian River power plant, traveling only 3-7 feet below the ground, or should I say, mud of the bay. Boaters beware!

Our leaders no longer represent our views. They seem poised to disregard our concerns about our beautiful shoreline, property value losses, loss of tourism, and the costs. They are not dealing with the realities of the available technology (at least eight offshore wind projects have been pulled because they could not be commercially successful even with significant government subsidies), not looking at alternatives that are more cost effective and promote significant environmental advantages (onshore wind, carbon capture and nuclear), and intentionally disregard the fact that Delaware is meeting all federal air quality requirements.

And they are being careless with our money. Estimates are that household electric bills will rise by $230-$350 per year, and businesses will see costs rise by many thousands, even millions of dollars.

There will be public hearings on the wind farm proposed regulations. Prior to that, an informational session is scheduled for June 5, 2024, from 4-7 pm at Beacon Middle School. Plan to attend, Be seen. Be heard.

Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.