Construction Law Blog
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Although we live in a politically-divided nation, there is one issue on which there seems widespread agreement: our country requires a massive upgrade to its infrastructure. Rundown airports, crumbling highways, obsolete ports, and dangerous bridges are now endemic across the United States. By contrast, Asian airports and elegant European bridges and rails show that our country needs an upgrade, the cost of which will be enormous.
Blog: Congress Strikes a Blow to President Obama’s “Fair Pay and Safe Workplaces” Executive Order 13673
On October 25, 2016, the Federal Acquisition Regulatory Council (FAR Council) and the U.S. Department of Labor implemented former President Obama’s Executive Order 13673: “Fair Pay and Safe Workplaces” rules. The rules became effective on October 25, 2016 and fundamentally altered the way federal contractors and subcontractors will need to handle and resolve employment and labor claims, as well as compliance issues involving their entire workforce. The final rules can also result in otherwise-capable companies being “blacklisted” and effectively barred from federal contracts and subcontracts based on labor and employment law violations related or unrelated to prior or current federal contract performance. The centerpiece of the new regulatory scheme was the new disclosure and responsibility requirements. Contractors and subcontractors needed to disclose all “labor law decisions” that they had during the three years (prior to bid submission) as part of the process of applying for a new federal contract or subcontract. If a contractor or subcontractor has too many “labor law decisions” to report or the few it has are too severe, pervasive, repeated, or willful in the eyes of the government “experts,” the company could be deemed “non-responsible” and denied a contract.
In a public works dispute in Massachusetts, a Massachusetts Court judge ruled that a general contractor could not recover any of its over $14 million claim against a public owner because it had violated its contract with the Owner by certifying that it had paid its subcontractors in full and on time when in fact it had not.[i] The case involves a contract dispute arising from a state and federally-funded project to design and construct a fiber optic network in western Massachusetts. The Owner was a state development agency established and organized to receive both state and federal funding to build a 1,200–mile fiber optic network known as MassBroadband123 in Western Massachusetts (the Project). Of that amount, $45.4 million was awarded pursuant to the American Recovery and Reinvestment Act of 2009 (ARRA). One of the stated goals of ARRA was (as its title suggests) to create jobs in the wake of the 2008 recession and to provide a direct financial boost to those impacted by the economic crisis. In the context of the instant case, that meant that, if there were to be subcontractors on the job providing labor and materials, they needed to be paid on a timely basis in keeping with the statutory purpose of stimulating the economy.
The Defend Trade Secret Act of 2016 (DTSA) was signed into law on May 11, 2016, and became effective immediately. The DTSA allows an owner of a trade secret to sue in federal court for trade secret misappropriation. Previously, only state law governed civil misappropriation of trade secrets. While the DTSA largely mirrors the current state of the law under the Uniform Trade Secrets Act (UTSA), adopted by 48 states, including Washington, there are some additions found in the new law.
Waiving Workers’ Compensation Immunity for Indemnity: Demystifying a Common and Scary-Looking Contract Term
Parties to a construction contract are often skeptical of terms in bold fonts, capital letters, or underlining, and especially terms requiring separate signatures or initials. A natural assumption is that such terms must be harmful if they require such emphasis. This concern is further heightened when the term involves complex areas of law, or waivers of rights that the party may not fully understand. In such cases, a little knowledge can go a long way.
On May 18, 2016, the U.S. Department of Labor (“DOL”) announced the new federal overtime rule under the Fair Labor Standards Act (“FLSA”). As a result of the new rule, over 4,000,000 workers will become entitled to overtime pay when they work extra hours. The rule becomes effective December 1, 2016.
The rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative, and Professional workers to be exempt, and changes the salary level that must be met before an employee can be exempt from overtime. The new minimum salary threshold will increase to $913 per week, $47,476 annually, and will apply to nearly all employees — an employee paid less than this threshold amount will be guaranteed overtime pay. The new federal threshold of $47,476 annually is more than double the current threshold of $23,660 annually ($455 a week), which has been in place since 2004.
The U.S. Equal Employment Opportunity Commission (the “EEOC”) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or employee because of the person’s race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information. It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
On March 25, 2016, the Occupational Safety and Health Administration (“OSHA”) published its final rule on occupational exposure to respirable crystalline silica (the “Silica Rule”). Crystalline silica is a basic component of soil, sand, granite, and many other materials. Silica exposure is classified as a human lung carcinogen and can cause lung cancer, silicosis, chronic obstructive pulmonary disease, and kidney disease. Approximately two million construction workers nationwide are exposed to respirable crystalline silica in their workplace as a result of drilling, cutting, crushing, or grinding silica-containing material, such as concrete and stone.
Even the most altruistic employers, at one point or another, will likely face an employment discrimination complaint against their company. Even meritless discrimination claims can cause potential exposure to costly attorney fees and/or significant settlement amounts to the complainant. Juries are unpredictable and litigants often use this fact to extract large settlement sums from employers trying to avoid the costs and unpredictability of litigation. If claims are handled appropriately, costly results can often be avoided (or at least minimized).
As construction lawyers, we rarely have an opportunity to dabble in the area of immigration law, but immigration affects contractors. For example, the SkyRise Tower (“SkyRise”) stands at the center of Biscayne Bay in Miami, and is being financed by foreign investors who have at least $500,000 to fund the project. Similar to the Statue of Liberty, SkyRise will be the gateway to U.S. Citizenship – not for the tired, poor, and huddled masses, but for rich foreign investors seeking a green card.