Legal

Employment Agreements Mitigate Construction Litigation Concerns

Employers often only require employees serving in a management position to execute employment agreements with provisions largely focused on competition, disclosure and solicitation. However, a more expansive use of employment agreements should be considered, particularly given the increased resort to litigation by all levels of employees utilizing the provisions of the Fair Labor Standards Act (FLSA).  

The FLSA essentially requires employers to properly compensate non-exempt employees for their actual hours worked at a regular rate for their first 40 hours worked during each week, as well as at an overtime rate of time and a half for every hour worked beyond the initial 40. With vastly increasing regularity, employees have been initiating litigation against employers in an effort to recover additional compensation for overtime hours. Employers utilizing a job bonus system for compensation, with or without an hourly rate of compensation, are particularly targeted, as are employers that fail to collect or maintain accurate time records. 
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Final Rule Revises EEO Framework for National Apprenticeship Act

The U.S. Department of Labor’s Employment and Training Administration issued a final rule updating the equal employment opportunity regulations that impact the National Apprenticeship Act of 1937. Current regulations prohibit discrimination in registered apprenticeship programs on the basis of race, color, religion, national origin and sex. An amendment to 29 CFR Part 30 updates the equal employment opportunity standards to include age (40 or older), genetic information, sexual orientation and disability among the protected base.
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Kentucky and Missouri Become Right to Work States

Kentucky and Missouri recently passed legislation that prevents workers from being required to join a labor union in order to accept or maintain a job, making them the 27th and 28th Right to Work states, respectively.
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Injunction Blocks Overtime Rule

Responding to a legal challenge filed by Associated Builders and Contractors (ABC) and a coalition of business groups, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction blocking the U.S. Department of Labor’s final overtime rule from taking effect Dec. 1. 
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Court Blocks 'Persuader' Rule

In mind-November, the U.S. District Court for the Northern District of Texas found the U.S. Department of Labor’s “persuader rule” to be unlawful and blocked it from taking effect.
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Curb Discovery Costs With a Tailored Arbitration Clause

Arbitration is premised on using arbitrators with knowledge of the subject matter to conduct more efficient proceedings. A lot of the uncertainty and expense can be eliminated with a well-crafted arbitration clause.  

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Trump Administration Promises Regulatory Relief

In November, Democrats netted a total of six seats in the U.S. House of Representatives and two seats in the U.S. Senate, falling short of the predictions of many political experts. Additionally, more than 200 candidates endorsed by Associated Builders and Contractors (ABC) in the House and 21 in the Senate were elected or re-elected, reflecting a better than 90 percent candidate success rate for those ABC endorsed. 
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Revised I-9 Form Now Available; Required by Jan. 22

The Department of Homeland Security and U.S. Citizenship and Immigration Services (USCIS) have released a revised I-9 Form that employers must use beginning Jan. 22, 2017, to verify all new hires' employment eligibility, including U.S. citizens and non-citizens. Employers who fail to use the new form on or after Jan. 22 may be subject to penalties.
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Don’t Wait Until It’s Too Late to Understand Protective E&O Policies

Protective E&O is an essential insurance policy where perceived concerns about the amount and adequacy of the design firm’s professional liability insurance can be questioned in relationship to the complexity and size of the project. Brokers and insureds need to be aware of several seemingly innocuous clauses contained in many of these policies.
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LEED Liability: Construction Contract Concerns for Green Building Projects

Despite the continuous narrative tied to green building, construction contracts have simply not kept pace, and most form contracts or standard clauses do not address contractual issues specific to sustainable projects. 
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Medical and Benefits Costs Are Top Concerns

Fifty-six percent of construction businesses surveyed for the 2016 Travelers Risk Index report they worry most about medical cost inflation and legal liability, followed by rising employee benefits costs and broad economic uncertainty. Rounding out the top eight construction business concerns are attracting and retaining talent, employee safety and workplace violence, legal and regulatory compliance, and cyber risk and data breaches.
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How Does Safety Impact Surety Bonding?

When safety issues become a factor in a contractor’s ability to finish a project, the surety starts to question what other issues might be out there that could have a negative impact on the contractor’s ability to complete the project.
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Surety’s Impact on Emerging Trends in Public Construction

Given the choice of security requirements, the surety market continues to provide the product with the best combined benefit for contractors and their obligee in today’s evolving construction and surety markets. 
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Preliminary Injunction Granted Against ‘Blacklisting’ Final Rule

On Oct. 24, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that prevents the Federal Acquisition Regulatory (FAR) Council from implementing the Fair Pay and Safe Workplaces final rule, commonly referred to as the blacklisting rule, which was scheduled to go into effect on Oct. 25.
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Surety Industry Advocates for Inclusion of Bonds on Federal and State P3s

Even though procurement methods have evolved—including the use of P3s—construction remains a risky business, making the protections that surety bonds provide for taxpayers’ investments and the payment guarantees for subcontractors and suppliers just as relevant and important in P3s. 
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How Do the Employee Benefits You Offer Aid Retention and Curb Turnover?

We could have the best programs in place, but if our employees can’t navigate the plan, it hurts them and our bottom line. Our internal benefits team provides education, claim assistance and even billing negotiations. 
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Surety Bonds, LOCs and Parental Guarantees: What’s the Difference?

To address the security need, owners and contractors can be faced with a choice between traditional surety bonds and letters of credit (LOC). Additionally, parental guarantees are often included as a supplement or substitute for the security. These alternatives have unique implications that should be considered by contractors and owners when choosing the best path.
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Sureties Hungry for Business Across Market Sizes

Construction Executive surveyed top leaders in the surety bonding industry to create a big-picture view of the current state of the market. Overall, the news is positive for contractors. Experts say construction and surety market cycles have been strong, creating increased competition. 
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Preparing for the First Contractor-Surety Meeting

Successful contractors spend time and effort establishing their first surety company relationship. Contractors that want faster answers and the benefit of the doubt from their surety in a delicate situation will always welcome face-to-face visits with their professional agent and underwriter. 
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Inside the Mind of a Surety Bond Underwriter

It is truly amazing how much risk contractors take on a daily basis for a seemingly modest return. Likewise, for the surety underwriter—which is, in fact, guaranteeing the contractor’s work—a tremendous amount of trust is involved.
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Executive Insights

Eighteen surety experts offer advice on how contractors can take their bonding capacity to the next level, how character impacts bondability, the cash management techniques contractors should employ to be successful as the economy recovers, and the bonding implications as the government promotes joint ventures as a way for small businesses to participate in federal projects.


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Beyond the Basics: Three Overlooked Bonds to Keep Projects on Task and on Target

There are numerous types of bonds to consider depending on the size and scope of a project. Don't forget about wage and welfare bonds, transactional commercial surety bonds and subdivision/completion bonds.
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An Overly Soft Credit Environment Can Adversely Affect Small Contractors

Fast bond products or “quick issue” bonds have sped up the process of obtaining a bond for smaller projects. Quick turnaround and minimal underwriting—sometimes solely based on credit score—allow for speedy answers when time is of the essence. That’s the upside. The downside of this softer credit-based underwriting is that the relationship-building and counseling process can suffer. 
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Three Onerous Contract Provisions to Avoid

Contractors must carefully read and study contracts before signing them. While this may seem obvious, it is surprising how often project participants sign agreements containing clauses that a party did not read, did not understand or did not take seriously.
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‘Blacklisting’ Final Rule Takes Effect

Under the new “blacklisting” rule, effective Oct. 25, federal contractors and subcontractors are required to disclose any violations of 14 federal labor laws and OSHA-approved state plans to an Agency Labor Compliance Advisor (ALCA). ALCA will perform an assessment of the violations and make a recommendation to the contracting officer about whether a federal contractor is responsible enough to be awarded a contract covered by this rule. 
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New Overtime Rule Raises Exemption Threshold to $47,476

The Protecting Workplace Advancement and Opportunity Act (S. 2707/H.R. 4773) has been proposed to require the DOL to examine the impact on stakeholders, including the public sector, before implementing any changes to the exemptions. The employer community is expected to redouble its efforts in support of this legislation and other solutions. 
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Technology, Insurance and Personnel Drive Safe Auto Programs

In the following Q&A Travelers offers insight on recruiting qualified commercial drivers and integrating them into a company’s safety culture, as well as the impact of telematics on construction fleets and the insurance products needed to limit financial liability.
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OSHA Delays Enforcement of Anti-Retaliation Provisions in Electronic Reporting Rule

OSHA has delayed enforcement of the anti-retaliation provisions in its electronic injury reporting final rule from Aug. 10 to Nov. 1. Just days before the announcement, Associated Builders and Contractors (ABC), TEXO and a coalition of stakeholders filed a lawsuit challenging the rule’s anti-retaliation provisions, which will limit some forms of post-accident drug testing and safety incentive programs by deeming them to be unlawfully retaliatory.
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Court Blocks DOL’s Final Persuader Rule

The U.S. District Court for the Northern District of Texas issued a nationwide injunction blocking the U.S. Department of Labor from implementing the final persuader rule, keeping it from taking effect July 1. 
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OSHA Finalizes Electronic Recordkeeping Rule

Effective Aug. 10, companies in high-hazard industries (including construction) with at least 20 employees must electronically submit injury and illness information, which OSHA will then post on its website.
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The Value of an Annual Partnering Meeting

The results of the partnering meeting, as it becomes an annual tradition, will prove to be valuable throughout the year, and help to provide a big-picture view of the construction business that otherwise would not be possible.  Read More >

Methods of Obtaining a Stay Pending Another Arbitration

Use of a motion to stay is a more straightforward method of obtaining a stay. However, a preliminary injunction can get the attorney in front of the court, and it could be a quick or last option to stay an arbitration.  Read More >

Assignment Issues Implicated in Contract Clauses

In theory, the purpose of an anti-assignment clause is to protect a party’s right to choose who it works for. Most industry professionals believe such a clause prevents assignment and conduct their affairs accordingly. If the goal is to actually prevent an assignment while a contract is executory, the clause needs to specifically state that any assignment in violation of the agreement is void and unenforceable.
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Agencies Consider Updating Regulations Governing Human Trafficking and the Audit Process

As these changes unfold during the coming months, construction companies performing government contracts should keep an eye on further guidance from the government regarding anti-human trafficking regulations and updates to current cost accounting methods. Interested parties should ensure that their internal procedures can be easily brought into compliance with the new requirements. 
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Dividing Liability at Contaminated Sites

Falling under the Environmental Protection Agency’s (EPA) hammer of “joint and several liability” in contaminated site cleanup cases is a costly proposition. Recently, the Supreme Court has thrown open the door to dividing these costs, and courts are now considering how to do it.   Read More >

Limit Litigation Expenses By Streamlining Storage of Electronic Information

There is no way to make litigation and electronic discovery inexpensive, but there are ways to reduce the expense if both sides communicate and commit to the process, and if a company manages its data so that it is easily accessible in the event litigation arises.  Read More >

Maximizing the Enforceability of Teaming Agreements

Basic contract law often treats teaming agreements as unenforceable “agreements to agree” (i.e., the parties agree that if, in the future, the bid proposal is accepted, then at that time the parties will negotiate the terms regarding the work to be performed). As such, contractors and subcontractors are placed in the unenviable position of needing an agreement that is frequently worth no more than the paper it is written on.  Read More >

Obama Administration Accelerates Anti-Business Labor Agenda

As the Obama administration nears its conclusion, federal labor agencies seem intent on issuing as many burdensome and anti-business regulations as possible. Many of the new rules are unprecedented in their scope and change decades of policies on which employers have come to rely.  Read More >

Executive Insights

Construction defect laws requiring pre-suit proceedings are intended to reduce litigation but result in extensive costs if not managed properly. Every contractor can do three things to reduce construction defect costs.
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A Prescription for Reducing Workers’ Comp Costs

The epidemic of prescription painkiller addiction is correlated to the uptick in workers’ compensation claims, with the greatest amount coming from the construction industry.  Read More >

When Hotel Brand Standards Collide With Good Practice

Unsuspecting hotel design and construction teams need to heed the warning: Rigid adherence to brand design and construction standards without factoring in specific regional and climatic conditions can result in significant mold and moisture issues in new hotel construction.
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A Big Week for Engagement and Advocacy

ABC's Legislative Week, June 20-24 in Washington, D.C., is extremely important this year as the association works to keep a merit shop-friendly congressional majority and elect a president who will protect contractors from burdensome regulations. 
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Dispute Review Boards: An ADR Technique That Works

The use of dispute review boards serves to minimize the acrimony that occurs through more conventional dispute resolution. It should be considered for major construction projects, beyond public-private partnerships and infrastructure. 
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Immigration Pitfalls for Employers to Avoid

Immigration-related civil fines for companies reached a record high of nearly $16 million in 2013. Worse yet, employers can be subject to criminal penalties, including prison time, should the government find they engaged in a pattern or practice of hiring, recruiting or referring (for a fee) unauthorized aliens. In addition to routinely performing in-house audits every six months, and before and after any significant business changes, the following guidelines should help employers navigate the uncertain immigration landscape.
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Industry Groups Challenge OSHA’s Final Silica Rule in Court

Employers covered by OSHA’s final rule on occupational exposure to respirable crystalline silica have until June 23, 2017, to comply with the new construction standard, except for requirements for laboratory evaluation of exposure samples, which begin on June 23, 2018.  Eight construction industry organizations have filed a petition for review of the final rule with the U.S. Court of Appeals for the 5th Circuit.
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Joint Lawsuit Filed Against DOL’s ‘Persuader’ Rule

ABC filed a joint lawsuit with ABC of Arkansas and a coalition of stakeholders in the U.S. District Court for the Eastern District of Arkansas challenging the Department of Labor’s final “persuader” rule, which will significantly broaden the reporting requirements for employers, attorneys, trade associations and other third-party advisors by redefining what is meant by labor relations “advice.” 
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EEOC Seeks More Data on Employees’ Pay and Hours Worked

The U.S. Equal Employment Opportunity Commission (EEOC) is considering public comments on a proposed a rule that would expand the data collected from certain employers on the Employer Information Report (EEO-1), effective Sept. 30, 2017. Under the proposed rule, federal contractors and private employers with 100 or more employees would have to report pay data and hours worked on the EEO-1 in addition to the existing reporting requirements. 

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OSHA and DOJ Double-Team Employers

On Dec. 17, 2015, OSHA and the Department of Justice (DOJ) agreed to “double team” employers to investigate and prosecute worker endangerment violations. While the agencies have worked together in the past, this is now a formal arrangement that employers should be very concerned about. While facing OSHA is bad enough, it’s a walk in the park compared to tangling with the DOJ. 
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How to Comply With Federal Employment Discrimination Regulations

In legal terms, Executive Order 11246 expressly prohibits federal contractors and federally assisted construction contractors and subcontractors that conduct more than $10,000 in government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin. The executive order also requires government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.
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Business Interruption Is No. 1 Global Risk

Business and supply chain interruption (BI) is the top risk for businesses globally for the fourth consecutive year. Rounding out the top three global business risks are market developments (i.e., market volatility or stagnation and intensified competition) and cyber incidents (i.e., cyber crime, data breaches and technical failures). 

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