Wiseman Orders DOL to issue TWAs



July 1, 2009

Superior Court Associate Judge David Wiseman ordered the CNMI Department of Labor to issue temporary work authorizations for the 127 foreign contract workers who are suing the CNMI DOL and officials for not enforcing their own laws.

Attorney Robert Meyers is defending the 127 foreign workers in a class action lawsuit that he filed in December 2008.

For years alien workers have routinely been cheated by employers. The DOL system is an unjust system that puts the burden of recovering unpaid judgments on the victims. The bonding and insurance companies also neglected their lawful obligation to pay the workers when the employers defaulted on the judgments.

The lawsuit was filed against Labor Secretary Gil M. San Nicolas, Labor Deputy Secretary Cinta Kaipat and Labor Director Barry Hirshbein with 20 “Does” that are surety or bonding or insurance companies that issued statutory surety labor bonds to the employers of the guest workers.

According to the Saipan Tribune:
Public Law 15-108 provides that a nonresident worker may request a court order directing the Labor Director to issue a TWA if that foreign national worker is pursuing a claim or case in the CNMI court system.

“While such a request is not well known about, it is something that every foreign national worker should ask their lawyer to request for them [if they're in the court system],” Myers told Saipan Tribune yesterday.

The TWA, he said, is essentially an “unlimited” one while the case is pending in court, even if the alien worker is not able to find a job after receiving an initial TWA.

“I don't believe the Department of Labor likes that reality but that's what the law provides. And it makes sense, given that question of how a foreign national worker is to support themselves and their loves ones,” Myers said.

A total of 127 alien workers who sued their former employers for wage and overtime violations and had been awarded damages by Labor filed the petition for judicial review in court.

In the petition, Myers asked the court to compel Labor and its officials to enforce the surety's obligations under the statutory labor bonds.
Siemer: DOL not responsible for enforcement
In January 2009 "Special Counsel for Labor", Deanne Siemer responded to the lawsuit claiming that the Superior Court did not have jurisdiction as the case failed to meet the requirements for a class action lawsuit.

Siemer said there is no commonality of status among the individual plaintiffs or the bonding companies and denied that PL 15-108 provides that DOL is responsible for issuing notice of claim to a bonding company or for collection of awards made in DOL-issued administrative orders.

DOL regulations lack enforcement, and place the responsible for collecting unpaid judgments upon the cheated workers.

From the January 14, 2009 issue of the Saipan Tribune:
Siemer denied that the Commonwealth Employment Act of 2007 provides that Labor is responsible for collection of awards made in the administrative orders that Labor issues in cases filed by alien workers against employers.

Siemer denied that the Nonresident Workers Act and its predecessors have any force and effect as they were repealed by the Commonwealth Employment Act of 2007.

She also denied that the Commonwealth Employment Act of 2007 requires Labor to issue any notice of claim to any bonding company.

Under the Commonwealth Employment Act of 2007, the special counsel said, Labor has no power to act against bonding companies.

Licensing and regulatory authority, she pointed out, is vested in the Department of Commerce.
Last year Deputy Labor Secretary Cinta Kaipat, Director Barry Hirshbein, and the "volunteer" all stated that the DOL was not responsible for enforcing the judgments.

The $6.1 million in unpaid judgments collected last year illustrates that DOL does not enforce their policies, and cheated workers have no path to justice.

In response to that collection, DOL came up with a scheme to have workers collect unpaid judgments in small claims court. The scheme even called for the cheated workers to serve their former unscrupulous employers who ripped them off.

In a May 14, 2008, Saipan Tribune article DOL "public education and outreach director" Rose Ada-Hocog said that they "just want to stress to workers that Labor is not a collection agency."

Associate Judge Inos Says DOL, not courts should enforce bonds.
In March 2009 Superior Court Associate Judge Perry Inos dismissed, for lack of jurisdiction, the consolidated small claims suit against bonding companies filed by 11 cheated Chinese workers. He ruled that the courts do not have the authority to enforce their bonds.

The CNMI Department of Labor has refused to enforce their own judgments issued under their administrative orders, and has refused to compel insurance companies to honor bonds when cheating employers fail to pay the employees. This is an interesting decision since this week the Fitial Administration will claim that their dysfunctional local labor system is "oh-so-wonderful" in the United Stated District Court in Washington, DC. Unfortunately, for far too many of he cheated and abused workers this is an outright lie.

The judge ruled that the primary reason the workers could not collect their bonds was that the DOL has not attempted to enforce the insurance companies obligations to pay the bonds. Have advocates and the guest workers not been saying this for years?

The Saipan Tribune quoted Judge Inos as saying that the workers need to compel DOL to do their job:
“Although there were administrative proceedings that preceded these actions, the plaintiffs have not filed petitions for judicial review or for mandamus to compel Labor to take action,” Inos said.
In response to the order issued by Associate Judge Inos, the DOL is now requesting that foreign contract workers with bond claims register at the DOL.

See also these posts for more information:

It's Official: Senator Al Franken

June 30, 2009


Finally, after nearly 8 long months Democrat Al Franken has been officially declared the winner in the Minnesota Senate race. Opponent Norm Coleman conceded the election after a unanimous state Supreme Court ruling favoring Al Franken.

From the Associated Press:
Franken spoke in Minneapolis on Tuesday soon after Republican Norm Coleman conceded the election. Coleman's concession came after the Minnesota Supreme Court said Franken should be certified as the winner.
Franken says he's "thrilled and honored by the faith Minnesotans have placed in me." He says he can't wait to get started, and believes he'll be sworn in next week.
Franken says he expects to sit on a few Senate committees, including Judiciary. That would put him in place to take part in Supreme Court nominee Sonia Sotomayor's confirmation hearings.
In a speech televised by CNN, Senator Franken said that he doesn't want to be thought of as the 60th Democratic Senator, but as the 2nd Senator from Minnesota.

From the New York Times:
“The Senate looks forward to welcoming Senator-elect Franken as soon as possible,” Senate Majority Leader Harry Reid, of Nevada, said in a statement.

Republicans seemed increasingly resigned to Mr. Franken joining the Senate and providing the 60th Democratic vote after the Democrat spent months in senatorial limbo. But there was no immediate comment from Senate Republican leaders in the wake of the decision.

Republicans are also well aware that two veteran Democrats, Senators Robert C. Byrd of West Virginia and Edward M. Kennedy of Massachusetts, are ailing and have regularly been absent from the Senate, making it very difficult for Democrats to assemble 60 senators on the floor.

Mr. Byrd was released from a Washington area hospital Tuesday after a stay of more than a month for a staph infection, but aides were unable to say whether he would be voting regularly when Congress resumes next week; Mr. Kennedy is undergoing treatments for brain cancer.

CNMI must pay $231 million to Retirement Fund

June 29, 2009


In a 17-page judgment, Associate Superior Court Judge Kenneth Govendo ordered that the CNMI government must pay the Retirement Fund over $231 million an an employer contribution rate of 16% . He also stated that Public Law 15-15 which suspended the government's contribution to the Retirement Fund in 2006 and 2007 under the Fitial Administration was unconstitutional.

From the Marianas Variety:
Govendo ordered the Department of Finance to pay to the Retirement Fund an employer contribution rate of 16 percent beginning with the pay period ending in Aug. 14, 2009; 30 percent of the hotel occupancy taxes; and 20 percent of the alcohol container taxes “which shall start on Aug. 1, 2009 and shall continue until further order of the court.”

The administration has said that it can only pay an 11 percent rate.

Govendo said the damages were calculated by examining several factors, including audit confirmation letters confirming the amounts due to the Fund and acknowledged by Finance as valid, the actuarially determined employer contribution rate, budget acts, memorandum of agreement where both parties signed at the end of 2001 that the government would pay $500,000 on every other non-government payday Friday, but which the government failed to pay, and for employer contributions which showed that the government owed $158,106,671.78 in deficient employer contribution payments as of April 15, 2009.

The statutory penalty for untimely payments of employer contributions is another factor in the calculation, Govendo said.

The government first stopped paying its employer contributions on Aug. 14, 1999 and since then, payments have been sporadic, he added.

The Fund showed that the balance owed for these statutory penalties as of fiscal year 2008 was $37,475,945.51.

Other factors include the special annuity which provides for the government to make contributions each year, but the government became delinquent beginning 2001, and the government now owes $407,459.63.

The government also owes the Fund $15,026,333.01 in appropriations to pay for cost of living allowances, an increase in annuity benefits, premiums for the Group Health and Life Insurance; $3,366,060.74 for early retirement bonus of government employees; $780,732.60 for Trust Territory prior service receivable; and the amount due from the general fund which was $10,698 as of Sept. 30, 2002.

Further, Govendo said, the government owes the Fund $16,474,037 in lost opportunity costs.

He noted that the court encouraged both parties to pursue a settlement.

The Fund is opposed to any settlement.
Since this lawsuit was filed in 2006, several other individual lawsuits have been filed naming the CNMI government and Retirement Fund as defendants. The lawsuit filed by Attorney Bruce Jorgensen last week also requested the federal court to declare that P.L. 15-15 is unconstitutional, as Associate Judge Govendo declared in his order. (Please see this previous post, Retirement Fund Lawsuits Filed in Federal Court, for background information and to access files.)

Now that the order is issued, how the government will come up with the dollars to pay this huge amount is going to be an issue. The CNMI relies on federal funding and U.S. taxpayers, and has no significant tax base.

Attorney Alepuyo was quoted in the Variety, addressing this issue:
The court said the defendants, through its own witnesses, have testified that the government cannot afford to pay the present 11 percent contribution rate under any circumstances, and that 1,000 government jobs would be lost if the employer contribution is raised beyond 11 percent.

Attorney Viola Alepuyo represented the Retirement Fund in this case while Assistant Attorney General Anthony Welch represented the government.

Govendo set a review hearing for Nov. 2, 2009.

In an e-mail, Alepuyo said the judgment resulted in “a great day for not just retirees, but for everyone who is a recipient of the Defined Benefit Plan.”

Alepuyo said the accusations against the Fund board of not caring about whether the CNMI government goes bankrupt “are simply untrue, unsubstantiated and unjustified.”

Alepuyo’s husband, House Floor Leader Joseph N. Camacho, is the running mate of Independent gubernatorial candidate Juan T. Guerrero, a former senator who is currently the Retirement Fund board chairman.

Alepuyo said their next move will be to communicate with executive and legislative branches.

“I’m sure that with all the great minds in the CNMI, we will be able to think outside the box in order to come up with realistic solutions to make the required payments as well as maintain critical public services,” she added.
While Attorney Alepuyo is optimistic, the governor's press secretary Charles Reyes reportedly told the Saipan Tribune that "the Fitial Administration will explore its options." The governor's typical move seems to appeal, delay and stall in such cases. Should we expect an appeal? Election is around the corner. How many more people can the governor afford to alienate and anger? Reyes was quoted:
“Given CNMI's current budget challenges, which are already quite formidable considering the dwindling resources, and the Legislature's refusal to implement unpopular but necessary austerity measures in an election year, this development presents another major financial challenge for our government,” he said.
Reyes has the audacity to criticize the legislature when the governor can fund lobbyists and use government mystery funds to pay for the anti-federalization lawsuit?

Juan Guerrero, who is running against Fitial in this year's election, repeated Attorney Alepuyo saying, "We will be able to think outside the box in order to come up with realistic solutions to make the required payments as well as maintain critical public services.” He also said:
He said accusations about the board not caring whether the government goes bankrupt are untrue, unsubstantiated, and unjustified.

The chairman said that shutting down the government would do nothing but hurt the very members the board is working hard to protect.

He cited that a large number of government employees are also Defined Benefit Plan members who contribute to the Defined Benefit Plan.

“Retirees get medical attention from the Commonwealth Health Center; rely on the Department of Public Safety to provide order and safety in the community; the Public School System to teach their children and grandchildren; and all the government agencies who provide essential services to our community,” Guerrero said.

“This is the very reason the board.chose first to communicate with the government before taking the final and ultimate step of filing a lawsuit,” Guerrero said.
The Saipan Tribune listed the breakdown of the amounts owed:
- $158,106,671.78: Deficient employer contribution payments;
- $37,475,945.51: Penalty for untimely payments of employer contributions;
- $407,459.63: Special annuity payments;
- $15,026,333.01: Unremitted appropriations;
- $3,366,060.74: Early retirement bonuses;
- $780,732.60: Trust Territory prior service receivable;
- $10,698: Receivables from the general fund; and
- $16,474,037: Lost opportunity costs

Summer in Our Garden

June 28, 2009


Photos W. L. Doromal ©2009 Florida Garden, monarch butterfly, Florida Butterfly plants