An Outline of Some Surprising New SBA Rules that Significantly Affect Both Large and Small Federal Contractors

The Small Business Administration (SBA) has just amended its regulations in several important respects.  While somewhat of a tangle, these amendments contain things that benefit large businesses as well as small ones that contract with the federal government. Read More ›

Davis-Bacon Act Compliance

Federal government construction contracting is a highly regulated business. One of the major challenges facing any government construction contractor is compliance with Davis-Bacon Act’s requirement to pay prevailing wages. Read More ›

Wrongful Termination Lawsuits

Employment is generally presumed to be “at will” absent contract terms to the contrary. Such a presumption enables both the employer and the employee to terminate the work relationship at any time, for any reason. “Employment at Will” allows employees to take employment without an obligation to stay for a specific duration of time, unless a contract expressly states a minimum employment period. Because employees are free to leave a job whenever they please, employers are also permitted to terminate employees whenever they desire, so long as the law does not prohibit the termination. But termination of an at-will employee may be prohibited by statute or by public policy and thus become wrongful. Read More ›

Best Practices for Fair Labor Standards Act Compliance

In addition to making wise and profitable business decisions, those in the construction industry should take care to fully comply with the requirements of the Fair Labor Standards Act. The Department of Labor has targeted the construction industry in particular for Fair Labor Standards Act violations related to pay practices and record keeping. Such violations may lead to hefty fines and assessments for general contractors and subcontractors. In order to avoid costly Fair Labor Standards Act violations, construction industry employers should prioritize record keeping and improve pay practices in compliance with Fair Labor Standards Act regulations. Several best practices for contractors and other construction industry employers are suggested below as a start to Fair Labor Standards Act compliance. Read More ›

Small Business Administration (SBA) Publishes Final Rule Implementing the National Defense Authorization Act of 2013

On May 31, 2016, the Small Business Administration (SBA) published a final rule amending its regulations implementing the National Defense Authorization Act (NDAA) of 2013.  The full rule can be found in the Federal Register at 81 Fed. Reg. 32,451.  The new rule became effective on June 30, 2016.  For construction contractors, the major changes covered by the final rule include significant modifications to the rules for Limitations on Subcontracting, revisions to the rules regarding affiliation, joint ventures and size protests, and small, but important, revisions to the rules regarding small business subcontracting plans. Read More ›

A Flimsy Facade Provides No Shelter: Personal Liability and the Project Architect - What is Meant by "Piercing the Corporate Veil?"

As a legal precept, officers and/or shareholders of a corporation cannot be liable to third parties for the acts of the corporation, which is an entity distinct from its stockholders/officers, even where one individual owns all of the corporation’s stock.  In limited circumstances, however, a court will find that it is appropriate to disregard the corporation, so as to hold a shareholder or officer liable for the corporation's acts or obligations.  As the U.S. Supreme Court succinctly stated, “The limited liability sought to be obtained through organization of a corporation may be denied where the sacrifice is essential to the end that some accepted public policy may be defended or upheld.” Anderson v. Abbott, 321 U.S. 349 (1944).  When this happens it is commonly referred to as “piercing the corporate veil.” Read More ›

Misclassifying Workers as Independent Contractors: A Costly Mistake

Construction companies must be aware of the difference between employees and independent contractors. State and federal agencies are increasingly targeting the misclassification of workers in the construction industry.  The repercussions for misclassifying employees as independent contractors, intentionally or not, include government audits, lawsuits by the government or by the misclassified worker, and payments of back wages, past taxes, civil penalties, and damages. Read More ›

USGBC Announces New LEED Credits for Structural Wood Building Materials. The Decision is a Boost to the Expanding Use of Wood in Public and Private Projects.

Increased LEED Credits for Use of Certified Wood.  

In early April, U.S. Green Building Council (USGBC) announced its expansion of the number of wood certification programs that it would recognize as qualifying for LEED credits.  USGBC’s new pilot program, which applies to LEED 2009 and LEED v4 systems, provides an Alternative Compliance Path credit for projects that use wood verified to be from legal sources by any of the following organizations:  Forest Stewardship Council (FSC), Sustainable Forestry Initiative (SFI), American Tree Farm System (ATFS), and the European-based Programme for the Endorsement of Forest Certification (PEFC).  This is in addition to the existing credit for wood products certified by FSC as having been obtained from responsibly managed sources.   Read More ›

California Employment Law Update - April 2016

The first quarter of 2016 brought sweeping new legislation that affects all California employers in significant ways.  Failure to understand and implement practices that follow the California employment laws can lead to significant liability that can be potentially crippling for many business owners.  This newsletter briefly summarizes some of the most significant recent changes to California employment law.  We encourage our readers to review the new legislation carefully and make changes to their business practices where necessary.  Read More ›

Giving Power to the Arbitrator: Permissible and Impermissible Delegations of Power

The construction industry has long been a leader in the use of arbitration. An arbitration clause was first included in the AIA standard form contract in 1915. The Federal Arbitration Act (FAA) was first enacted in 1925 and the American Arbitration Association was created in 1926. Although initially hostile, courts throughout the United States and the world have come to generally favor arbitration and the enforcement of arbitration agreements. But not all arbitration clauses are equally enforceable. As arbitration provisions have become more widely used, contracting parties have continued to test the limits of enforceability. This article discusses a generally permissible practice—incorporating by reference arbitration rules granting the arbitrator the power to determine the arbitrability of a dispute—and a potentially impermissible provision—prohibiting the parties from challenging the validity of the arbitration award. Read More ›