History of Alternative Employment Practices

Confronting Challenges to Disadvantaged Communities

Laying the groundwork to assist disadvantaged and small businesses, Mr. Kernan concentrated his law practice on surety bonding and apprentice training. From the mid-1980s Mr. Kernan concentrated his practice on Davis-Bacon labor matters, workers’ compensation, insurance coverage disputes, and ERISA benefits for employees, benefit design and management; all issues that benefited disadvantaged and small businesses.

History of Mr. Kernan’s Association with the Percy Alternative Employment Practice Program

The Percy Program was developed by Mr. Kernan as a plan to fit the framework required of Percy v. Brennan Case 73-cv-04279 and a decision issued by the Appellate Division Fourth Department of the New York State Supreme Court in a case brought by the New York State Department of Labor against Lancaster Development, Inc., Madden Construction, Inc., and Eastern Rock Products, Inc. The Lancaster decision, Lancaster Development, Inc. v. Ross 82 A.D.2d 1013 identified the need for a framework to provide employee benefits, including apprenticeship, to meet supplemental wage benefit requirements in compliance with the New York State Labor Law §220 and the federal Davis-Bacon Act 40 USC §§276a to 276a-5. The Percy Program was developed to address the Percy vs Brennan decision and the adverse Lancaster decision and to provide affirmative action that would benefit employees on public work projects.

Mr. Kernan submitted the Program for approval to the United States Department of Labor in 1983. By a letter of direction of June 14, 1984, the United States Department of Labor, Employment Standards Administration Wage and Hour Division advised that the provisions of the Program and their accompanying trust and adoption agreements were reviewed, and it was the opinion of the United States Department of Labor that they qualified as “bona fide” fringe benefit plans within the meaning of the Davis-Bacon Act and the applicable regulations of 29 CFR Part 5. That craft apprenticeship for workers training to attain journeyman status was allowed to be offset against the fringe benefit requirements only if the US Bureau of Apprenticeship and Training (BAT) or the appropriate State apprenticeship council recognized by BAT has approved the apprenticeship program.

On January 25, 1991, Mr. Kernan obtained approval for Oriska Corporation as an apprenticeship sponsor under regulation [part 601] and Article 23 of the New York State Labor Law, qualified under the 1937 National Apprenticeship Act section 1 (29 U.S.C. 50) under U.S. Department of Labor’s Bureau of Apprenticeship and Training (BAT) and C.F.R.T. 29, Subt. A, Pt. 29 and Pt. 30. (the Fitzgerald Act). Registration of the Percy Apprenticeship Program under the regulation 12 N.Y.C.R.R. 601.8 that existed when the Oriska Corporation program was registered and remains in full force and effect.

In 1991 Mr. Kernan utilized the Percy Program with the apprentice training as an Alternative Employment Practice to be provided with workers’ compensation insurance coverage as part of risk-management and loss control by the insurance carrier, incorporating apprenticeship training into the workers’ compensation insurance risk management, loss control and safety training of employees, by enrolling new entrants to the workforce to work alongside existing journeypersons, growing the depth of skilled workers, skilled workers whose ranks are being diminished through age and attrition. The workers’ compensation carrier subsidizes the apprenticeship programs by recognizing the savings in reduction of losses which reduces the exposures and liabilities of the claims required to be paid by the workers’ compensation insurance carrier.

The Percy Program was developed with the assistance of predecessors of Defendant State DFS officers: former Chief Deputy Frank Donohue, and former General Counsel Morty Greenspan, who worked tirelessly to shepherd the development of the Percy Program. The singular mix of tools provide training and working environments that exists nowhere else. Such rich benefits under the Percy Program results in retention of well trained, competent and safety conscious workers for employers who participate in the Percy Program.

It happens that 90% of the persons accessing the Percy Program have been disadvantaged or disadvantaged by natural selection, meaning that the disadvantaged have a difficult time being accepted into organized labor OJT apprenticeship programs. The Percy Program can work with unions utilizing union journeypersons for OJT apprenticeship of Percy apprentices, providing jobs to union members and apprentices, benefiting all.

The Percy Program begun in 1984 by Mr. Kernan, for 25 years has provided apprenticeship to hundreds in the skilled trades. The Percy Program moved from upstate New York to the Bronx in 1999 to accomplish the same substantial and permanent good that was accomplished upstate.

In 1998, Mr. Kernan through Oriska Corporation on behalf of the Percy Program, began the Apprenticeship Programs in the New York City area at SUNY Maritime College in the Bronx. The Percy Apprentice Training Program is an integral part of safety training and loss control for Workers’ Compensation insurance coverage and Employee Benefit insurance coverages designed specifically to comply with prevailing wage and supplement benefit requirements for the construction industry. The related classroom instruction part of apprenticeship training was designed to comply with requirements of the New York State Departments of Labor and Education. Since 1999, the Percy Program, in partnership with State University of New York Maritime College (“SUNY Maritime”), has trained skilled trade persons through the OJT Apprentice Program.

The Percy Program works under the delegation of authority by the Federal Bureau of Apprenticeship Training to the NYS Departments of Education and Labor. The Percy Program works under the guidance, authorization and regulation of the New York State Departments of Education and Labor.

Workers’ safety is affected positively utilizing the Percy Program, resulting in greater control of risk, reducing loss for employers and injuries and illnesses to employees, through instruction in safe and healthful practices.

The length of apprenticeship varies from two to five years, depending on the occupation. The Program works especially well in public works construction where the federal Davis-Bacon law and the NYS Labor Law Article 8 keep wages in the skilled trades high. The apprentice is paid a percentage of the journeyperson rate while in apprenticeship as part of the workforce working under the guidance of more experienced workers called journeypersons.

Successful completion of all requirements results in award of a NYS Department of Labor Certificate recognized by the Federal Bureau of Apprenticeship Training verifying journeyperson competency.

Creating Pathways to Success for Disadvantaged Persons

As part of apprentice training programs for which Mr. Kernan was registered with the New York State Department of Labor, he developed work processes for On-the-Job training and related classroom instruction for the following skilled construction trades: Carpenter, Plumber, Steam Fitter, Mason, Steelworker, Roofer, Operating Engineer, Electrician, and Skilled Laborer.

Mr. Kernan was appointed by the Commissioner of the New York State Department of Labor to the Apprenticeship Training Task force, to establish guidelines for classroom instruction in the skilled construction trades.

Mr. Kernan was appointed by the US Secretary of Labor as a member of ERISA Negotiated Rulemaking Advisory Committee, for the first rulemaking undertaken by the USDOL Pension & Welfare Benefits Administration. Mr. Kernan was awarded a commendation by Secretary of Labor Alexis Herman on April 11, 2000 for 2 years voluntary work on the Rulemaking Committee, which ultimately resulted in the publication of the ERISA §3(40) Rule.

During the late 1990s, Mr. Kernan became licensed as a Professional Engineer in several jurisdictions in the mid-Atlantic region of the US. He also became licensed as a General Contractor in Florida after taking and passing the appropriate licensing exams.

Mr. Kernan initiated a successful disadvantaged and disadvantaged business enterprise bonding program guaranteed by the US Department of Transportation and the US Small Business Administration which ran from 1998 through 2002.

Today Mr. Kernan has consolidated his knowledge and understanding of apprenticeship programs and surety bonding to lift distressed communities out of poverty and solve the chronic unemployment that affects them. His vision is to establish and mentor legitimate entrepreneurs as an alternative employment practice under Title VII of the Civil Rights Act, 42 USC 2000e-2, to provide a pathway to skills to compete for good paying occupations in disadvantaged communities. In essence, his vision is to reestablish the American dream for all:

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