Displaced Building Service Workers Protection Act: one year on.

In November 2002, the New York City Council passed, and Mayor Bloomberg signed into law, the Displaced Building Service Workers Protection Act, [section] 22-505 of the Administrative Code of New York City, which extends significant job security protections to building service employees in New York City.

The legislation provides covered building service employees with temporary protection from the loss of employment when the building in which they are employed is sold or its control is transferred to another entity of, if they are employed by a contractor, when their contractor is replaced with a different contractor by the owner or manager of a building.

The Act requires a successor building owner, manager or contractor to offer employment to the predecessor employer's incumbent employees, for a period of 90 days, subject to termination for cause or a decision by the new employer to operate with fewer employees.

To facilitate the successor employer's retention obligations, the Act requires the predecessor employer to provide a list of its employees' names, dates of hire and occupational classifications to the successor employer at least 15 days before transferring a controlling interest in a building or the termination of a building service contract.

The legislation is enforced through a private right of action for employees who are discharged or not retained in violation of the Act.

An employer who violates the Act may be subject to injunctive relief and a damage award that encompasses an affected employee's back pay, benefits, attorney's lees and costs.

The Act contains an opt-out provision, however, that affords unionized employers a complete exemption from the Act's notice and retention requirements if they are already, or agree to become, bound by the terms of a collective bargaining agreement that includes provisions that govern the discharge or lay off of building service employees.

Local 32B-32J, SEIU actively lobbied for the statute and continues to monitor the industry's compliance with it.

Unions such as Local 32B-32J have a strong interest in enforcing the Act because the purpose of the retention requirement is to enhance the bargaining unit's chances for survival under federal labor law's "successorship" doctrine, regardless of any sales, transfers of other changes in control that change the identity of the employer of building service workers.

According to Larry Engelstein, General Counsel of Local 32B-32J, there have been a handful of situations since passage of the Act in which the union has threatened litigation against building owners or cleaning contractors for violating the Act.

In each of those instances, however, the new employer relented and agreed to comply.

Thus, to date there have been no court decisions interpreting the Act.

In addition, there do not appear to have been any lawsuits filed challenging the legality of the Act, either on the grounds that it is preempted by the National Labor Relations Act or that it is an unconstitutional intrusion by the City Council into an area of the law within the jurisdiction of the state legislature.

Thus, the first sixteen months of life under the Act have been relatively uneventful, as the industry appears for the most part to have adapted to life under this new regulation.

Paul Salvatore is a partner and John E Fullerton III is a senior associate at Proskauer Rose LLP.

This article does not, and is not intended to, constitute legal advice, readers are advised no to take, of refrain from taking, any action based on this article without consulting legal counsel.