In the world of construction, the old legal saying “equity aids the vigilant, not those who slumber on their rights” rings true. A weary contractor risks more than an OSHA violation – when a contractor fails to protect its legal rights, it can wake up near the end of the project only to find that it has lost a substantial amount of money with little ability to recover.
In a recent U.S. Supreme Court case about pregnancy discrimination, Justice Breyer asked: “Why, when the employer accommodated so many, could it not accommodate pregnant women as well?” As an employer, that is a question you should now be asking when preparing, reviewing, or updating your company’s accommodation policies.
Many employers have policies and practices to ensure accommodation of disabled workers or those with temporary injuries or disabilities. However, employers may be overlooking their legal obligations to accommodate another group of workers: pregnant women who have pregnancy-related work limitations. Continue Reading Does your Employee Handbook stand up to the Supreme Court’s latest decision about accommodations for pregnant workers?
The City of Philadelphia has issued new code requirements for construction worker safety training. The new rules went into effect on October 1, 2015, and the Department of Licenses and Inspections has announced that strict enforcement will begin on April 1, 2016.
Under the new regulations, all contractors and employees (including subcontractors) performing construction or demolition work in the City of Philadelphia for which permits have been issued are now required to complete OSHA 10 safety training, or an approved equivalent. This requirement applies to all trades, as well as state-registered home improvement contractors. Workers are required to carry written proof establishing that they have completed an OSHA 10 training course while on the job site, and their employers must also maintain on-site proof of completion for each worker. This information must be furnished to the Department of Licenses and Inspections upon request. The OSHA 10 training is only required to be completed once and does not expire.
Additionally, all contractors licensed under Section 9-1004 of the Philadelphia Code must employ at least one supervisory employee who has completed OSHA 30 safety training, or an approved equivalent, within the past 5 years. Construction or demolition of major buildings requires continuous oversight by a site safety manager who has completed an OSHA 30 course. The designated site safety manager must carry an identification card or certificate of completion issued by the provider of the OSHA 30 training course.
Unmanned aerial vehicles, commonly referred to as “drones,” are appearing more frequently in the skies over construction project sites.
Drones typically operate from a handheld device, such as an iPhone, and can be connected to a Wi-Fi network. The physical design utilizes four to eight rotary blades, which allow for fluid vertical movement and aerial stability. Such stability—the ability to hover in place for an extended period of time—can prove particularly beneficial for surveying a job site. Drones can be used to capture images of the work from above and then transmit the information to one of a number of mapping software programs, which are, in turn, used to analyze and monitor all phases of a project, from site preparation to completion.
Drones also are proving to be a valuable marketing tool, by allowing for aerial footage or video of job sites, which can be shown to clients and potential clients. In the near future, drones may be used for physical transportation of equipment and project materials. Indeed, multinationals, including Amazon and Google, have famously begun discussing the use of drones to transport and deliver goods to their customers.
Drone technology possesses the potential to fundamentally change the construction industry.
As we discussed last summer, the Occupational Safety and Health Administration (OSHA) issued a new Confined Space in Construction Standard, which went into effect on August 3, 2015 and required heightened training, continuous worksite evaluations and communication for all construction workers performing work in manholes, crawl spaces, tanks and other confined spaces not intended for continuous occupancy that are located on construction projects. Enforcement of the new standard was postponed through October 2, 2015 for all contractors covered by the standard to provide additional time to train and acquire necessary equipment. In October 2015, OSHA further extended the temporary enforcement delay through January 8, 2016, but this time limited the extension to contractors performing residential construction work, which includes those contractors working on single-family homes, duplexes and townhouses. The extension did not apply to contractors working on multi-unit apartment buildings. Earlier this month, OSHA issued a memorandum that again extended the delayed enforcement of the standard through March 8, 2016 for residential construction work.
Under the delay policy, OSHA will not issue citations to contractors engaged in residential construction work if the contractor is making good faith efforts to comply with the confined space standard, as long as the contractor complies with either the training requirements of the new standard, found at 29 CFR 1926.1207, or the former training requirements, found at 29 CFR 1926.21(b)(6)(i).
Factors considered by OSHA to determine if a contractor is engaged in good faith compliance efforts include:
- If the contractor has not trained its employees as required under the new standard, whether the employer has scheduled such training;
- If the contractor does not have the equipment required for compliance with the new standard, including personal protective equipment, whether the contractor has ordered or otherwise arranged to obtain such equipment required for compliance and is taking alternative measures to protect employees from confined space hazards; and
- Whether the contractor has engaged in any additional efforts to educate workers about confined space hazards and protect workers from those hazards.
Full enforcement of the confined spaces standard for non-residential contractors remains in effect, and those contractors should continue to comply with the standard’s requirements. We will continue to monitor the enforcement of the standard for residential projects.
Lisa M. Wampler is a Partner in the Construction Group of Cohen Seglias Pallas Greenhall & Furman PC. She has an active and diverse construction litigation practice and represents owners, general contractors, construction managers and the different trades in complex matters involving all phases of the construction process.
Lori Wisniewski Azzara is an Associate at Cohen Seglias Pallas Greenhall & Furman PC. Lori practices in the areas of construction and commercial litigation and has experience in contract negotiation, claims for delay and inefficiency, mechanics’ liens, and all types of contractual dispute.
Arbitration has become a very common and effective way to resolve construction disputes in lieu of traditional litigation, and it is easy to understand why:
- The parties can select arbitrators with construction expertise who speak their language and are more likely to understand complex construction issues than a general court of law.
- Arbitrations are characteristically speedier from inception to award.
- Discovery (the parties’ exchange of information and taking of depositions) is often more truncated and can, therefore, be less costly.
- Arbitrator awards are typically binding and not normally subject to an appeals process that tends to add more time and cost to the outcome.
We would be remiss, however, if we did not mention that arbitration is not for everyone. Parties are often required to pay filing and other administrative fees that are considerably more expensive than the cost of court filings, and they must also pay the arbitrators, who typically bill by the hour (feel free to insert your own generic lawyer joke here). In the construction context, we find that owners, developers, and public entities often will elect litigation over arbitration.
The finality of the award cannot be overstated. This article about a recent federal court decision – in which a party discovered after the award that one of the arbitrators failed to disclose a number of serious charges that included the unauthorized practice of law – drives the point home. Under the Federal Arbitration Act, courts may only vacate an arbitration award under very limited and extreme circumstances:
- the award was obtained by corruption, fraud, or undue means;
- there was evident partiality or corruption in any of the arbitrators;
- the arbitrators were guilty of misconduct for refusing to hear evidence relevant and material to the dispute; or
- the arbitrators exceeded or imperfectly executed their powers.
In other words, a court will not disrupt an arbitration award simply because the arbitrators may have “gotten it wrong.”
It can be strange and counterintuitive to think about how a dispute should be resolved when signing a contract. Most parties to a construction contract are, understandably, thinking about the excitement of starting a new project, how to build the project cooperatively and safely, and how to manage it in a way that will be profitable to the companies involved. It is nonetheless important to think about dispute resolution while negotiating your construction contract. This is so because the decision to arbitrate or litigate is often one that is made within the contract document itself rather than by the election of the parties after the dispute has arisen. If a dispute develops, the language of the contract will have important implications for how your dispute is decided, who will decide it, and how much time and money it will cost to resolve.
Tony Byler is a Partner at Cohen Seglias Pallas Greenhall & Furman PC and a member of the Construction Group. As a trial lawyer, he focuses his practice on representing public and private owners, contractors, subcontractors and material men. Tony also serves as an arbitrator on the Roster of Neutrals for the American Arbitration Association.
Daniel E. Fierstein is an Associate in the Construction Group of Cohen Seglias and focuses his practice on construction law. Dan counsels clients at all tiers of the construction industry, including general contractors, subcontractors, owners, developers, and design professionals.
The U.S. Department of Labor (DOL) issued guidance on July 15 aimed at curbing the misclassification of employees as independent contractors. The guidance provides several examples of workers in the construction industry. It is now clear that the DOL is bent on targeting contractors and subcontractors. If you have mechanics, installers, estimators, or any workers functioning as an independent contractor, you are probably at risk.
The DOL’s guidance begins by stating that most workers should be classified as employees and not independent contractors. According to the DOL, only workers that are genuinely in business for themselves may be classified as independent contractors. The DOL uses six factors to determine whether someone is in business for him/herself:
- Is the worker’s work an “integral part” of the employer’s business? According to the DOL, “for a construction company that frames residential homes, carpenters are integral to the employer’s business because the company is in business to frame homes, and carpentry is an integral part of providing that service.” Therefore, hiring an individual who uses the tools of the trade as an independent contractor is risky business for almost any construction company.
- Does the worker’s managerial skill affect the worker’s opportunity for profit and loss? According to the DOL, a true independent contractor has the opportunity not only to make money but to lose it by making poor business decisions. The DOL is looking for independent contractors to exercise business judgment (not just decide how many hours they are going to work or how many projects they are going to accept from the employer).
- How does the worker’s relative investment compare to the employer’s investment? In order to be a true independent contractor, the worker must make a substantial investment (and therefore undertake some risk for a loss). The DOL’s view of what qualifies as a substantial investment may surprise you. Merely purchasing hand tools and other equipment is not enough. The DOL even cited a case where a group of rigging welders had invested in equipped trucks costing between $35,000 and $40,000 as being too small of an investment.
- Does the work performed require special skill and initiative? For this factor, the DOL focuses on business skills and not technical skills and uses the following example: “A highly skilled carpenter provides carpentry services for a construction firm; however, such skills are not exercised in an independent manner. For example, the carpenter does not make any independent judgments at the job site beyond the work that he is doing for that job; he does not determine the sequence of the work, order additional materials, or think about bidding the next job, but rather is told what work to perform where. In this scenario, the carpenter, although highly skilled technically, is not demonstrating the skill and initiative of an independent contractor (such as managerial and business skills).”
- Is the relationship between the worker and the employer permanent or indefinite? According to the DOL, a worker who works for the same employer for a sustained period of time is not showing the business initiative that one would expect from a true independent contractor. Workers who work until they are terminated look like at-will employees (not independent contractors).
- What is the nature and degree of the employer’s control? According to the DOL, in order to qualify as an independent contractor, the worker must control meaningful aspects of his own business and stand as a separate economic entity. This means that imposing quality control measures and schedules on a worker will likely render him/her an independent contractor.
In sum, the DOL’s guidance marks a clear signal to those in the construction community that using independent contractors carries significant risks. Mitigating measures, like issuing 1099 Forms and entering into written independent subcontractor agreements, will more often than not fail to save the day. These rules hold true for workers in the field and those performing office/non-manual work.
We have worked with dozens of contractors on classification issues. If you have any questions about the proper classification of someone who performs work for your company, please contact Marc Furman or Jonathan Landesman.
Last month, the Occupational Safety and Health Administration (OSHA) added a new rule that provides increased protections to those working in confined spaces on construction projects. The new rule, which goes into effect on August 3, 2015, applies to manholes, crawl spaces, tanks and other confined spaces not intended for continuous occupancy that are located on construction projects. OSHA predicts that the new rule will prevent approximately 780 serious injuries and 5 deaths each year.
Confined spaces are defined as those that (1) are large enough for an employee to enter; (2) have limited means of entry or exit; and (3) are not designed for continuous occupancy. The rule provides construction workers in confined spaces with the same protections already afforded to workers in manufacturing and general industry but differs in several construction-specific respects. “Unlike most general industry worksites, construction sites are continually evolving, with the number and characteristics of confined spaces changing as work progresses. This rule emphasizes training, continuous worksite evaluation and communication requirements to further protect workers’ safety and health,” according to Dr. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health.
The new rule requires a “competent person” to initially evaluate the project site and identify all confined spaces. Employers must then train their employees on the existence, location and dangers posed by each confined space. Workers not authorized to perform entry rescues must also be trained on the dangers of attempting such rescues. Employers are further required to coordinate with emergency services before workers enter certain confined space. After this pre-entry planning is conducted, employers must continually monitor the confined space for air contaminant and engulfment hazards.
Communication is heavily emphasized in the new rule. Because multiple contractors are likely present on a project site, each with its own workers needing to enter the confined space, contractors are required to coordinate and share safety information with each other. The controlling contractor, such as the general contractor, is responsible for ensuring compliance with the new rule by its subcontractors and visitors to the project site.
Contractors who have employees or subcontractors working in confined spaces should familiarize themselves with the new rule’s requirements and immediately start implementing them. Significant fine and citations can be issued for each violation of the new rule. Additional information and compliance assistance materials are available on OSHA’s Confined Spaces website.
Lisa M. Wampler is a Partner in the Construction Group of Cohen Seglias Pallas Greenhall & Furman PC.
Lori Wisniewski Azzara is an Associate at Cohen Seglias Pallas Greenhall & Furman PC. Lori practices in the areas of construction and commercial litigation and has experience in contract negotiation, claims for delay and inefficiency, mechanics’ liens, and all types of contractual disputes.
On December 3, Jennifer Horn and Maria Panichelli presented the second webinar in their core construction curriculum series for Women Impacting Public Policy and Give Me 5%. The presentation, entitled “Best Practices in Construction,” covered suggested best practices for before, during, and after conclusion of a construction project, in the context of both state and federal jobs. The presentation provides tips on contracting, documentation, compliance, and claims prevention strategies. Start implementing business practices that make the difference between a profitable construction project and one that exposes your company to financial risk now! Check out: “Give Me 5: Best Practices in Construction,” here.
WIPP is a national nonpartisan public policy organization advocating on behalf of its coalition of 4.7 million businesswomen including 75 business organizations. WIPP identifies important trends and opportunities and provides a collaborative model for the public and private sectors to increase the economic power of women-owned businesses. Give Me 5%, named after the 5% federal contracting goal for women-owned businesses, was created to educate women business owners on how to apply for and secure federal procurement opportunities. GiveMe5 is working to improve the WOSB Procurement Program to increase access to contracts for women entrepreneurs.
Jennifer and Maria will begin the Core Construction Curriculum series with two webinars. On November 12th at 2:00pm they will be presenting Give Me 5: Construction Unit FAR 101 – Part 1, The Fundamentals of the Federal Acquisition Regulations and Federal Procurement: The Bidding Process. The Federal Acquisition Regulations or “FAR” can be confusing whether you are new to federal contracting or have been contracting with the government for years. This webinar will focus on improving participants’ understanding of FAR and its application in the construction context. The presentation will cover the bidding process for both sealed bidding and negotiated procurement. You can find a description of the presentation and registration information, here.
On December 3rd at 2:00pm Jennifer and Maria will be presenting Best Practices in Federal Construction. Whether you a contractor working on federal, state or private projects, certain construction practices should be followed to ensure that you and your company are protected on the project. Observing best business practices can mean the difference between a profitable construction project and one that exposes your company to financial risk. This Webinar will focus on best construction practices before, during and at the conclusion of a construction project. Read more and register, here.
We will keep you posted on additional webinar topics and times. If you have suggested topics, feel free to contact Jennifer or Maria.
Jennifer M. Horn is a Partner at Cohen Seglias and a member of the Construction Group. She concentrates her practice in the areas of construction litigation and real estate.
Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.