DUNLEVEY, MAHAN

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DUNLEVEY, MAHAN FURRYMIDWEST ROOFING
CONTRACTORS ASSOCIATIONOctober 2009
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PROVISIONS INCORPORATING OTHER DOCUMENTS

• While it is not unusual for a subcontract
  agreement to incorporate other documents, most
  subs do not familiarize themselves adequately
  with those provisions, and, thus, they are not
  aware as to what they have agreed
• Extraneous documents incorporated by reference
  can be problematic because the documents may be
  in conflict with each other and with the
  subcontract agreement

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• Look to see if the subcontract agreement
  has a provision that sets forth which document
  controls in the event of a conflict between
  them. If there is no such provision, one
  should be added to the subcontract agreement
  providing that in the event of such a conflict,
  the subcontract agreement controls

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PROVISIONS INCORPORATING OTHER DOCUMENTS

• Typically, subcontract agreements incorporate
  by reference extraneous documents such as
• the prime contract
• specifications
• general conditions
• bid documents
• special conditions
• addenda thereto
• others

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ASSUMING TO GC HIS DUTIES TO OWNER

• Subcontract agreements typically provide
  that the sub is assuming all obligations
  to the general that the general owes to the
  owner with respect to the subcontracted work
• These are very sweeping provisions, but
  are not uncommon
• Again, a sub should be sure what
  duties it is assuming

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PRIOR INSPECTION PROVISIONS

• Subcontract agreements sometimes contain
  provisions requiring the sub to have, prior to
  performing any work, thoroughly visited and
  inspected the site to determine any problems
  with the plans and specs, or to discover the
  exact condition of the site
• This is an attempt to avoid having to pay the
  sub for differing site conditions

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• If you cannot delete such a provision, it
  should at least be softened by adding the
  concept that the sub shall provide notice of any
  error within a reasonable time after the sub
  discovers them, regardless of whether the sub
  has yet begun work

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UNREASONABLE INDEMNIFICATION PROVISIONS

• Be careful of overly-broad indemnity
  provisions
• It is reasonable for the sub to indemnify
  the general for matters arising out of the
  subs work or fault

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• It is also reasonable for the sub to
  indemnify the general for anything arising
  from the work of others who the sub
  supervises (i.e. subs Employees or
  sub-subcontractors)
• It is not reasonable for the sub to
  agree to indemnify the general for the
  negligence of somebody else, especially for
  the generals own negligence

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UNREASONABLE INDEMNIFICATION PROVISIONS

• Indemnification provision may expressly state
  that sub will indemnify general for something
  caused by generals or owners own negligence
• Or, may be written so broad as to include
  things caused by generals or owners own
  negligence

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UNREASONABLE INDEMNIFICATION PROVISIONS

• Any indemnification provision which would
  have a sub indemnify the general for the
  generals own negligence should be rewritten
  and/or deleted
• Whatever indemnity the sub is providing the
  general, the general should provide a reciprocal
  indemnity to the sub
• The general should indemnify the sub for
  anything arising out of the work or actions of
  the general

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NO LIEN PROVISIONS

• Beware of provisions which would have a sub,
  before performing any work, forever waive any
  right to file or perfect a mechanics lien
• Some states have statutes which expressly
  state that such a provision is unenforceable.
  Ohio does not
• Therefore, if a sub encounters such a
  provision, it should be deleted

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NO LIEN PROVISIONS

• Missouri statute (429.005) says such a
  provision is against public policy and
  unenforceable
• Kansas statute (16-1803(b)(2)) says such a
  provision is against public policy and is void
  and unenforceable

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SCHEDULING PROVISIONS

• Beware of provisions which provide the
  general with sole control over scheduling of
  your work
• If the subs work is much more costly to
  perform in winter weather, then such provision
  is even more dangerous

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• Ideally, the schedule would be attached to the
  agreement or otherwise agreed upon at the
  beginning, and changes would not be made without
  the subs consent or without the sub being able
  to obtain extra compensation for delay or more
  difficult performance

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NO DAMAGES FOR DELAY CLAUSES

• State that in the event of a delay in the
  subs work, the sub will not be entitled to
  extra compensation - but, perhaps, will be
  entitled to an extension of time
• Some states have a statute which provides
  that such a no damage for delay clause is
  unenforceable when the owner or general causes
  the delay CAUTION! Can be enforceable for
  other delays

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SUMMIT CONTRACTORS

• OSHRC Struck down multi-employer policy in
  2008.
• Eighth Circuit Reversed OSHRC and sent case
  back to them 4/2009.
• OSHRC Adopted Eighth Circuit decision 7/27/09

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• Contract language may be important
• Presence of general contractor on site may be
  important
• Understand your responsibility to the employees
  of others on job site under your contract.
• May be able to limit exposure through contract
  language.

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OSHA FIELD OPERATIONS MANUAL (FOM)

• New manual effective 3/26/09.
• Some significant changes.
• State OSHA citation may NOT any longer be used as
  the basis for a federal repeat. (Caution)
• But, it may be used to document employer
  knowledge to support a willful citation.

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FOM (continued)

• Employee complaint includes only present
  employees, not past employees.
• Complaint by telephone is treated as a non-formal
  complaint until a signed copy of information is
  received.

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FOM (continued)GENERAL DUTY CLAUSE

• Employer fails to keep workplace free from
  hazard
• Hazard was recognized
• Causing or likely to cause death or serious
  physical harm and
• Feasible and useful method available to correct
  hazard.
• Involved only cited employers employees.

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FOM (continued)GENERAL DUTY CLAUSE (continued)

• Recognition of hazard can be based on
• Employer recognition
• Industry recognition
• Common sense recognition
• Employer recognition
• Statements made by employer, management, or
  supervisory personnel during or before inspection
• E-mails

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PROTECTING AMERICAS WORKERS ACT

• H.R. 2067 Will amend OSHA to expand coverage,
  increase protections for whistle blowers and to
  increase penalties for certain violations.
• 4/23/09 Introduced and referred to House
  Committee on Education Labor.

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• H.R. 242 Directs SOL to revise regulations
  concerning the recording and reporting of
  injuries and illnesses.
• 3/16/09 Referred to Subcommittee on Workforce
  Protections.

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• H.R. 849 Directs SOL to issue interim and final
  combustible dust standards.
• 3/23/09 (same as H.R. 242)

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• H.R. 2199 Amend Act to authorize SOL to prevent
  employee exposure to imminent danger.
• 4/30/09 House Committee on Education Labor.

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IMMINENT DANGER ACT

• If inspector determines imminent danger, employer
  must correct immediately (reasonably could cause
  death or serious physical harm.)
• (Could be just about anything.)
• Employer must take immediate action to remove all
  exposed employees and correct.

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• Employer refuses to comply, inspector can shut
  down job and remove employees.
• Failure to comply additional civil penalty of
  10,000 - 50,000 a day.
• OSHA can obtain injunction in Federal District
  Court.

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OSHA BUDGET PROPOSAL FY 2010

• 50.1 million over FY 2009 160 new CSHOs.
• Emphasis on enforcement and new regs, less on
  VPP, alliances, and compliance assistance.
• Increase in whistleblower and discrimination
  investigators.

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PROTECTING AMERICAS WORKERS ACT

• Introduced in Senate on August 7, 2009
• Sponsor Ted Kennedy
• Similar to legislation introduced in House on
  April 23, 2009
• S.B. 1580

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KEY COMPONENTS

• Increases whistleblower protection
• Redefines imminent danger refusal to work
• Employee has 180 days to file complaint
• Remedy injunctive relief, reinstatement,
  compensatory damages, civil penalties

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• For reporting purposes a serious accident is one
  in which two (2) or more employees are
  hospitalized.
• Victims rights
• Any employee who sustains an injury that is
  subject of OSHA investigation or family of
  deceased employee.
• May
• meet with A.D. regarding inspection

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• receive a copy of citation
• before citation is modified in the case of a
  serious incident or death appear before parties
  and make a statement.

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• Employee rep may now file a notice within contest
  period that citation fails to properly designate
  violation as serious, willful, or repeated that
  proposed penalty is not adequate or concerning
  abatement period.
• Affected employees may now challenge any
  settlement agreement and may have a hearing on
  challenge.

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PENALTIES - CIVIL

• Willful 8000 120,000
• Willful (death) 50,000 250,000
• Willful 25,000 250,000
• (death lt25 employees)
• Serious 0 12,000
• Serious (death) 20,000 50,000
• Serious 10,000 50,000
• (death lt25 employees)

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• Other than serious same as serious
• Failure to Abate up to 12,000/day
• Violation of posting
• requirement 0 - 12,000

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PENALTIES - CRIMINAL

• Willful (death) -- fines as set out for civil
  penalties imprisonment up to 10 yrs.
• Willful (serious injury) fines as set out for
  civil penalties imprisonment up to 5 yrs.
• Employer includes any responsible corporate
  officer
• Advance notice of inspection imprisonment up to
  2 yrs.

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• False statements imprisonment up to 5 yrs.
• Serious bodily injury injury involving
  substantial risk of death, protracted
  unconsciousness, protracted and obvious physical
  disfigurement, or protracted loss or impairment
  of the function of a bodily member, organ, or
  mental faculty.

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EMPLOYEE FREE CHOICE ACT

• Biggest change since 1935
• Current rule
• Submit signed cards for 30 of employees to
  trigger secret ballot election
• Good-faith bargaining between union and employer
• Employees vote to ratify CBA

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EMPLOYEE FREE CHOICE ACT

• New rule
• Submit signed cards for a majority of employees,
  no secret ballot election
• Secret ballot election still occurs if union
  submits signed cards for between 30 and 50 of
  employees
• It is all about the Card

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EMPLOYEE FREE CHOICE ACTCURRENT STATUS

• S. 560
• 3/10/09 Read twice and referred to Committee
  on Health, Education, Labor Pensions
• H.R. 1409
• 3/10/09 Referred to House Committee on
  Education Labor.
• 4/29/09 Referred to Subcommittee on Health,
  Employment, Labor Pensions.

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RESPECT ACT (Re-Empowerment of Skilled and
Professional Employees and Construction Trade
Workers Act)

• Current definition of supervisor in Section 2(11)
  of NLRA an employee with authority to hire,
  transfer, suspend, layoff, recall, promote,
  discharge, assign, reward or discipline other
  employees or to responsibly direct them or to
  adjust their grievances or effectively to
  recommend such action
• New definition eliminates assigning and
  responsibly directing and requires supervisors to
  perform duties for a majority of work time

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RESPECT ACT

• Divides supervisor loyalty between company and
  union
• Unions will use non-supervisors under new
  definition to collect union authorization cards
• RESPECT shows union willingness to change any
  rule
• More union members more union money
• (Not yet introduced.)

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PATRIOT EMPLOYER ACT

• Tax credit if meet definition of Patriot Employer
  1 of taxable income
• Patriot Employer definition
• Maintain ratio of full-time workers in U.S. to
  full-time workers outside U.S.
• Maintain corporate headquarters in U.S.
• Pay hourly wages sufficient to keep a family of 3
  out of poverty

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PATRIOT EMPLOYER ACT

• Patriot Employer definition (continued)
• Pay difference between an employees salary and
  military salary and continue the health insurance
  for all National Guard and Reserve employees
  called for active duty
• Pay 60 of each employees health care premiums

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• Provide employees with defined benefit retirement
  plan or a defined contribution retirement plan
  that matches 5 of employee contribution
• Maintain neutrality in employee organizing
  campaigns

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PATRIOT EMPLOYER ACT

• Definitions are vague
• Results in lower tax rate for large companies
  willing to unionize
• Neutrality union wins

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PATRIOT EMPLOYERS ACTCURRENT STATUS

• S. 829
• 4/20/09 Read twice and referred to Senate
  Committee on Finance
• H.R. 989
• 2/11/09 Referred to House Committee on Ways
  Means

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FEDERAL HEALTHY FAMILIES ACT

• 7 paid sick days per year
• Time off for self, spouse, children, and parents
  for medical and preventive healthcare
• Small employers 15 employees
• Incremental leave time
• High curb appeal
• Obama supports and mentioned at Democratic
  convention

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HEALTHY FAMILIES ACTCURRENT STATUS

• S. 1152
• 5/21/09 Read twice and referred to Committee
  on Health, Education, Labor Pensions

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FAMILY AND MEDICAL LEAVE ACT

• Long awaited regulations
• Clarification provisions
• Employers can deny attendance bonuses
• Mandatory timely leave designation by employer
  5 days instead of 2
• Clarify light duty does not exhaust FMLA leave
• Intermittent leave?
• New forms

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FAMILY AND MEDICAL LEAVE ACT

• Military families
• Any qualifying exigency
• Extended leave 26 weeks

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FAMILY AND MEDICAL LEAVE ACT

• Possible amendments
• Broaden coverage 25 employees
• Broaden coverage of family members i.e.
  grandparents
• LOA for eldercare and domestic violence
• 24 hours for school activities

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FMLA

• H.R. 2132 Permits leave to care for a same-sex
  spouse, domestic partner, parent-in-law, adult
  child, sibling, or grandparent with a serious
  health condition.
• 4/28/09 Referred to House Committee on
  Education Labor, House Administrative, and
  Oversight and Govt. Reform for a period to be
  determined by the Speaker.

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• H.R. 824 Would allow employees to take
  additional leave, parental involvement leave to
  participate in or attend childrens and
  grandchildrens educational and extracurricular
  activities.
• 5/4/09 Referred to House Subcommittee on
  Federal Workforce, Post Office, and D.C.

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• H.R. 389 Eliminate hours of service
  requirement.
• 1/9/09 Referred to House Committee on
  Education Labor, House Administrative, and
  Oversight and Govt. Reform for a period to be
  determined by the Speaker.

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• H.R. 262 To prevent hate crimes and to provide
  support services to victims of hate crimes.
• 3/16/09 Referred to Subcommittee on Workforce
  Protections

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• H.R. 1723 To provide for a paid FMLA insurance
  program.
• 5/14/09 Referred to Subcommittee on Workforce
  Protection. Reform for a period to be determined
  by the Speaker.

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• H.R. 2339 To establish a program that supports
  efforts of states to provide partial or full wage
  replacement for new parents, so that they can
  spend time with new infant or newly adopted
  child.
• 5/7/09 Referred to House Committee on
  Education Labor.

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• H.R. 2515 to amend FMLA to allow leave to
  address domestic violence, sexual assault, or
  stalking and to include domestic partner under
  the Act.
• 5/20/09 Referred to House Committee on
  Education Labor, House Administrative, and
  Oversight and Govt. Reform for a period to be
  determined by the Speaker.

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WORKING FAMILIES FLEXIBILITY ACT

• So-called union of one
• 15 or more employees
• Requires good faith negotiations with any
  employee who desires a change in days of work,
  hours or location
• Multi-step procedure meetings, written
  documentation, and reconsideration

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WORKING FAMILIES FLEXIBILITY ACT

• If deny, employer must provide reasons in writing
  including
• Costs in agreeing to change
• Effect of change on customer demand
• Overall financial resources involved
• Employee entitled to representative of choice
• Employee protected from retaliation
• Enforced by Dept. of Labor - penalty of 1,000 -
  5,000

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WORKING FAMILIES FLEXIBILITY ACT

• H.R. 1274
• 3/3/09 Referred to House Committee on Education
  Labor, House Administrative, and Oversight and
  Govt. Reform for a period to be determined by the
  Speaker.
• 8/19/09 Referred to Subcommittee on Courts and
  Competition Policy.

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FOREWARN ACT

• Amends Worker Adjustment Retraining
  Notification Act for shut downs and mass layoffs
• 90 day written notice of closure not 60
• 50 or more employees not 100
• Mass layoff redefined to 25 employees (not 50)

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FOREWARN ACT

• Doubles back pay penalties
• Difficulties foreseeing shut down
• Obama supports

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FOREWARN ACT

• 4/23/09 Referred to House Committee on
  Education Labor.

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CIVIL RIGHTS ACT 2008EQUAL REMEDIES ACT

• Removes 500,000 damage caps for Title VII
• 15-100 employees 50k
• 101-200 employees 100k
• 201-500 employees 200k
• Punitives, pecuniary and non-pecuniary
• Adds compensatory and punitive damages to FLSA
  back pay x 2 if willful

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CIVIL RIGHTS ACT 2008EQUAL REMEDIES ACT

• Co-sponsored by Obama
• Bars mandatory arbitration
• Permits NLRB to award back pay to undocumented
  employees
• Makes it easier for employees to recover expenses
  of suits even if not prevailing party in all
  respects

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CIVIL RIGHTS ACT 2008EQUAL REMEDIES ACT

• Amends Equal Pay Act to limit employer defense of
  a bona fide non-discrimination factor
• ADEA class actions allowed for unintentional
  claims disparate impact
• Hillary Clinton sponsored with Edward Kennedy in
  previous session
• Not yet introduced.

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FAIR PAY ACT

• Equal pay claims
• Extends statute of limitations
• Affected individuals could sue as well (including
  estate and retirees)
• Overturns Lilly Ledbetter v. Goodyear Supreme
  Court
• Difficult to defend stale claims
• Obama in favor

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• Not another Equal Pay Act
• Vote 247 to 171
• Signed into law 1/29/09
• Retroactive to 5/27/07

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ADA AMENDMENTS

• Amends Americans with Disabilities Act January 1,
  2009
• Overrides Supreme Court decisions
• Definition of disability broadened

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ADA AMENDMENTS

• Impairments in remission or episodic if limits
  major life activity when active, i.e. cancer
• Mitigating measures (other than glasses) not
  considered for impairment substantially limiting
  major life activity i.e. hearing aids

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ADA AMENDMENTS

• Regarded as disabled provision broadened
• Major life activity expanded to include bodily
  functions
• DOL regulations to come
• Litigation explosion

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FLSA

• H.R. 12
• S. 182 Amend FLSA to provide more effective
  remedies to victims of wage discrimination on
  basis of sex.
• 1/9/09 Placed on Senate Legislative Calendar.

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CONTEMPLATED, BUT NOT YET INTRODUCED

• Independent Contractor Proper Classification Act
• Employment Non-Discrimination Act
• Equal Remedies Act