Gravel2Gavel Construction & Real Estate Law Blog

In mid-May, Cal/OSHA issued its second high heat advisory this year, reminding all employers “to protect their outdoor workers from heat illness by taking precautionary measures.” Cal/OSHA confirmed that it will be inspecting “outdoor worksites in industries such as agriculture, construction, landscaping, and others throughout the heat season” for compliance with California’s heat illness prevention regulations.

CalOSHA reminds employers that these regulations require all employers to protect outdoor workers by taking these basic steps:

• Train all employees and supervisors about heat illness prevention
• Provide plenty of cool, fresh water and encourage employees to drink water frequently
• Provide a shaded area for workers to take a cool down recovery break
• Prepare an emergency heat illness prevention plan for the worksite, with training for supervisors and workers on what to do if a worker shows signs or symptoms of heat illness

Special “High Heat” procedures are also required when temperatures reach 95 degrees:

• Observe workers for signs and symptoms of heat illness
• Remind workers to drink water frequently
• Provide close supervision of workers in their first 14 days of employment (to ensure acclimatization)
• Have effective communication systems in place to be able to call for emergency
• assistance if necessary

“When temperatures spike, employers are required to make sure that workers have enough water, shade and rest even if they don’t report any symptoms associated with heat illness,” said acting Cal/OSHA Chief Juliann Sum. “Preparation and easy access to water, rest and shade are the most effective ways to ensure that outdoor workers stay healthy.”

Additional Resources: DIR, Heat Illness Prevention and Heat Illness Prevention etool; CalOSHA, Cal/OSHA Issues First High Heat Advisory of 2014 as Temperatures Rise Across the State (Apr. 30, 2014) and Water. Rest. Shade; U.S. Dept. of Commerce, Local weather forecast by “City, St” or zip code

On January 23 and February 3, House Bill 2297 and Senate Bill 2051 were introduced, proposing to amend Title 62, Chapter 6, Part 5 of the Tennessee Code to expand home improvement contractor licensing and other requirements to the entire state, to clarify the meaning of owner, contractor, and commissioner, and to remove certain exemptions in the home improvement contractor law. If signed into law, HB 2297/SB 2051 will take effect July 1, 2014.

Present law defines a “home improvement contract” as an agreement between a “contractor” and an owner for the performance of home improvement. HB 2297/SB 2051 clarify that such a contract is between a home improvement contractor and owner. A “home improvement contractor” is anyone, other than a bona fide employee of the owner, who undertakes or offers to undertake or agrees to perform any home improvement for the owner, whether or not the person is licensed or subject to the licensing requirements. “Owner” will be defined as “(A) Any homeowner, tenant or any other person who orders, contracts for or purchases the home improvement services of a home improvement contractor; or (B) The person entitled to the performance of the work of a contractor pursuant to a home improvement contract.” Present law specifies that no home improvement contractor’s license is required for a retail clerk, clerical employee, salesperson or “other employee of a licensed home improvement contractor”. HB 2297/SB 2051 specify that this exemption applies to employees who do not perform home improvement work, amending from the current law “an individual who performs labor or services for a home improvement contractor or subcontractor for wages or salary” is exempt for the licensure requirements.

HB 2297/SB 2051 will also require a home improvement contract to contain information regarding each home improvement contractor who will perform work pursuant to the contract, amending from the current law reference to certain home improvement contractors being exempt from licensure due to the county exclusions under the contractor provisions.

Additional Resources: HB 2297; SB 2051; TN Gen. Assem. Fiscal Review Committee Fiscal Note SB 2051 – HB 2297 (Mar. 7, 2014)

Assembly Bill 1885 would require an allegedly aggrieved person to provide notice of an alleged violation of laws governing special access for disabled persons before filing a civil action against the owner of the property, agent, or other responsible party where the alleged violation occurred (Responsible Party). It would required notice as specified to be provided to the Responsible Party, and the Responsible Party to respond within 30 days with a description of the improvements to be made or with a rebuttal response to the allegations. If the Responsible Party elected to fix the alleged violation, it would have 90 days to do so and, if the improvements were timely made, the Aggrieved Party would be barred from filing a civil action. Except, the new provisions would not apply to claims for recovery of special damages for an injury-in-fact, and a court or jury would be authorized to consider previous or pending actual damage awards received or prayed for by the alleged aggrieved party for the same or similar injury. On May 6, in committee, AB 1855 failed to pass but reconsideration was granted.

According to the Assembly Committee on Judiciary Synopsis, Assemblyman Frank Bigelow, the author of AB 1885, believes that the “bill is necessary to provide relief to businesses who are having lawsuits filed against them because they are not in compliance with certain ADA regulations,” and “that thousands of small businesses across the state are having lawsuits filed against them for not being in compliance with the smallest of building standards established under the Americans with Disabilities Act and should have a 90-day window to correct any violations to come into compliance with the often times complex and confusing regulations before a lawsuit can be filed against them.” In contrast, it reports that opponents believe “that this bill singles out people with disabilities for unprecedented obstacles to the enforcement of civil rights, deprives them of a remedy for actual violations, and will deter, not encourage, compliance with disability discrimination law,” and “that the promise of the bill may be misleadingly unattainable because the requirements it would impose are inconsistent with federal disability discrimination law and therefore would not preclude the law suits from which businesses seek protection.”

It remains to be seen whether this bill will gain traction.

Additional Resources: California Legislative Information, AB 1885 (Feb. 19, 2014); Assembly Committee on Judiciary Synopsis (Bill Analysis) (May 6, 2014)

ENR’s 2013 — Images of the Year “features photos that best capture the mood and flavor of construction during 2013.” The 38 featured photos, selected from hundreds of images submitted, will no doubt lighten your mood.

Additional Sources: ENR, Close Call: 2013 Photo Contest Runners-Up (Jan. 15, 2014); ENR, Construction Photography Contest Judging is Challenging and Rewarding (Jan. 14, 2013); ENR’s 2012 The Year in Construction Photo Contest Winners

UPDATE: Forbes, The Recession Generation: How Millennials Are Changing Money Management Forever

Apparently everyone is battling to win the millennials’ spending power. If you aren’t, maybe you should be.

Who are the “millennials?” In his Times Magazine article Millennials: The Next Greatest Generation?, Joel Stein explains that they are the “80 million Americans born roughly between 1980 and 2000.” (Another article reported that they are 90 million strong.) They are also commonly referred to as the Millennial Generation, Generation Y, Generation We, Global Generation, Generation Next and the Next Generation, and Echo Boomers. This translates into the oldest millennials being about 35 years old.

Now who are they really? In his article, Joel noted that “[t]he National Institutes of Health found that for people in their 20s, Narcissistic Personality Disorder is three times as high than the generation that’s 65 or older… Millennials received so many participation trophies growing up that 40 percent of them think they should be promoted every two years – regardless of performance.” However, he argues that “rather than being inherently self-centered or overconfident, millennials are just adapting quickly to a world undergoing rapid technological change. They’re optimistic, they’re confident and they’re pragmatic at a time when it can be difficult just to get by.”

Recognizing that there are distinct differences between millennials and prior generations, the Sacramento Business Journal recently published an article titled Top 5 millennial trends of 2014. Because “millennials have more purchasing power than ever before,” — one article reported that millennials are “expected to spend more than $200 billion annually starting in 2017 and $10 trillion in their lifetimes” — marketing to them needs to be strategic and innovative.

The Sacramento Business Journal identified the top five millennial trends as follows:

1. Social media paradigm shift — “… Instead of being afraid to share information, users are now focusing on what benefits come from sharing personal information online.”
2. Social ads are replacing banner ads — “…Traditional online banner ads are mostly ignored by social media users and are only clicked 0.2 percent of the time they are seen. Social ads are smaller and more suited for smartphones than traditional banner ads, and they are preferred by Generation Y.”
3. Pictures speak louder than words — “…millennials value brands that allow them to express themselves in unique ways. Photo sharing is a way millennials can connect with others through creative expression.”
4. Say goodbye to luxury branding — “…These millennials do not seek out products that show off their high status. Instead they are driven by experiences and opportunities to create memories that they can share with friends…Brands like Nike and Honda are now considered luxury brands, and are generally favored by the majority of millennials.”
5. More mobile — “…two out every five millennials say they would feel anxious without their smartphones. It is imperative that every platform be optimized for mobile use.”

How will you win the battle for their spending power?

Additional Sources: CNN Money, How young tech millionaires invest (Feb 27, 2014); Governance Studies at Brookings, How Millennials Could Upend Wall Street and Corporate America, Morley Winograd and Dr. Michael Hais (May 2014); Sacramento Business Journal, 4 ways Millennials will change business and politics (May 28, 2014); The Growing Home-buying Power of Millennials (Apr. 21, 2014); Trends 2014: Buying Power Shifts To Millennials And Female Home Owners (Aug. 27, 2013); Millennials: The Next Greatest Generation? (May 13, 2013); Sacramento Business Journal, Top 5 millennial trends of 2014 (Apr. 7, 2014) and Who will win the battle for the millennial grocery shopper? (Apr. 14, 2014); U.S. Chamber of Commerce Foundation, The Millennial Generation (Nov. 14, 2012)

The 2013 State of Women-Owned Businesses Report commissioned by American Express Open is a summary of important trends from 1997 through 2013. It provides insight into opportunities for women-owned business enterprises (WBEs) in 2014. The Report reinforces trends seen in earlier reports and in other research — the number of WBEs “continues to rise at rates exceeding the national average, yet they remain smaller than the average firm.” According to the Report, “[a]s of 2013, it is estimated that there are over 8.6 million women-owned businesses in the United States, generating over $1.3 trillion in revenues and employing nearly 7.8 million people.” And, WBEs “have added an estimated 175,000 jobs to the U.S. economy since 2007.” The Report also found that, nationally, the number of WBEs “has increased by 59% since 1997.”

The Report’s important findings include:

• “The number and economic contributions of women-owned firms continue to grow. The rate of growth in the number of women-owned enterprises over the past 16 years remains higher than the national average. Between 1997 and 2013, the number of women-owned firms is growing at 1½ times the national average.
• Over the past six years, since the depth of the U.S. recession, the only businesses that have provided a net increase in employment are large, publicly traded corporations… and privately held majority women-owned firms…
• Since 1997, the growth in the number and economic contributions of firms owned by women of color is nothing short of remarkable. Comprising just 17% of women-owned firms 16 years ago, firms owned by women of color now account for one in three women-owned firms in the U.S.
• Comparing trends in the number and revenue accomplishments of women-owned and all firms by industries finds that women-owned firms are exceeding overall sector growth in eight of the 13 most populous industries, and in two of those industries (construction and transportation) women business owners are standing toe-to-toe with their competitors in terms of revenue accomplishments.
• The states with the fastest growth in the number, employment and revenues of women-owned firms are the District of Columbia, North Dakota, Nevada, Wyoming and Georgia. The fastest growing metropolitan areas for women-owned firms are San Antonio TX, Portland OR, Houston TX, Riverside CA, and Washington DC/MD/VA.” (Emphasis added).

WBEs “are standing toe-to-toe with their industry peers — meaning that an equal share of women-owned firms in the sector are generating in excess of half a million dollars in revenues annually — in two industries: construction, where 13% of women-owned firms and 11% of all construction firms are pulling in $500,000+ per year; and in transportation and warehousing, where 6% of each are generating $500,000 or more in revenues.” Nonetheless, WBEs in construction at 7% are still below average. The construction industry, as a whole, however, has seen a decline both in the number of WBEs and all firms since 2002.

However, according to the Report, the industries with the highest concentration of WBEs are:

• Health care and social assistance — 53%
• Educational services — 45%
• Other Services — 41%
• Administrative Support and Waste Management Services — 44%
• Construction — 7%
• Transportation and Warehousing — 11%
• Finance and Insurance — 20%

Between 1997 and 2013, the states with the fastest growth in the number of WBEs are:

• Georgia — up 112%
• Texas — 93%
• North Carolina — 91%
• Louisiana — 94%
• Nevada — 84%

In contrast, during this same period of time, the states with the lowest growth in the number of WBEs are:

• Alaska — 12%
• West Virginia — 23%
• Iowa — 23%
• Ohio — 27%
• Kansas — 27%

As of 2013, in top 25 most populous metropolitan areas, the greatest number of WBEs are located in:

• New York, NY/NJ– 663,200
• Los Angeles, CA — 432,300
• Chicago, IL — 308,000
• Miami, FL — 229,800
• Washington DC/MD/VA — 209,700

The Report is certainly an interesting read and encourages optimism and growth in 2014 for WBEs.

Additional Source: Woman-Owned, Minority-Owned Construction Company Marks 108 Years and Counting (Apr. 25, 2014); Governor Terry McAuliffe, 2014 Women in Construction Week (Mar. 2, 2014) — “NOW, THEREFORE, I, Terence R. McAuliffe, do hereby recognize March 2-9, 2014, as WOMEN IN CONSTRUCTION WEEK in the COMMONWEALTH OF VIRGINIA, and I call this observance to the attention of all our citizens.”; PRWeb, Turner Construction Company Awards More Than $1 Billion to Minority and Women-Owned Subcontractors in 2013 (Jan. 27, 2014); Turner Construction Company, Promoting A Positive Business Environment

This week the Wall Street Journal published Exposing the EPA, an editorial that was very critical of EPA’s consideration of a “pre-emptive” veto of the Pebble Mine Project, a proposal to develop America’s largest copper and gold mine in Southwest Alaska. The Journal writes that EPA has been planning for several years to exercise its authority under the Clean Water Act (CWA) even before a permit has been filed with the US Amy Corps of Engineers (Corps of Engineers). This controversy highlights the problems inherent in the CWA’s division of authority between the Corps of Engineers and EPA with respect to the administration of CWA Section 404’s dredge and fill permitting authority. Under the CWA, the discharge of a pollutant into navigable waters is regulated by EPA under CWA Section 402 with regard to most point source discharges while the CWA Section 404 authorizes the Secretary of the Army, acting through the Corps of Engineers, to issue permits for the discharge of dredged and fill material into navigable waters. However, CWA Section 404(c) also authorizes EPA to veto the Corps of Engineers’ specification of a disposal site specified in the permit.

The decisions in the recent Mingo Logan Coal Company case illustrate the EPA’s complex authority to veto a CWA Section 404 permit specification “whenever” the EPA Administrator determines that the disposal of dredged and fill materials into a specified area will have an adverse environmental impact. In Mingo Logan, the Corps of Engineers issued a CWA Section 404 permit in 2007, but EPA then vetoed the specified disposal area in 2010. A lower court held that EPA had no authority to veto a permit after it was issued. The US Court of Appeals for the DC Circuit reversed the lower court, and the Supreme Court denied Mingo Logan’s appeal. The Court of Appeals emphasized the fact that the text of the CWA did not place any temporal limits on EPA’s ability to exercise its oversight of the Corps of Engineers. See 714 F 3d 608 (DC Cir 2013). However, it should be noted that the Court of Appeals stated that EPA’s veto authority can only be issued “post-permit”, after the Corps of Engineers has reviewed the permit application and designated the approved disposal area. Apparently, EPA believes that its powers are not so constricted by the law.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Anthony Cavender, the author of this blog.

Additional Source: The U.S. Supreme Court Upholds EPA’s Cross-State Air Pollution Rule in EPA v. EME Homer City Generation, L.P., Paving the Way to Further Use of Cap-and-Trade Programs to Control Emissions of SO2 and NOx from Electric Power Plants

Those are words no one ever wants to hear. Hearing them is no doubt worse when, in fact, you don’t have one. In the last two months, two construction projects were brought to a halt when an unlicensed subcontractor was discovered. On April 11, the California Contractors State License Board (CSLB) issued a press release confirming that work on the drywall portion of the $150 million, 45-story Pinnacle Towers construction project in downtown San Diego has stopped after the CSLB determined the drywall sub-contractor is not properly licensed as a contractor in California. Yesterday, it announced (CSLB #14-15) that it has ordered Nova Drywall Systems Inc., based in Vancouver, British Columbia, to halt work on a $100 million apartment and retail center that is being constructed by Onni Group, a Canadian developer, in downtown Los Angeles after finding that Nova Drywall is not properly licensed in California; the drywall subcontract is reportedly worth $5.5 million. Nova Drywall applied for a CSLB license last January, but it has not yet completed the licensing process.

Acting on a tip, on May 7, the CSLB and California Department of Industrial Relations/Division of Labor Standards Enforcement (DLSE) investigators made an unannounced visit to the 32-story tower being constructed at 888 South Olive Street. An inspection revealed that Nova Drywall does not have a contractor license for the drywall work being performed by its 28 employees on the project since January. Onni Contracting California has a valid California contractor license.

California law defines “contractor” broadly to include “any person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or herself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, development or improvement, or to do any part thereof … ” (emphasis added). “Contractor” also includes subcontractors and specialty contractors.

The DLSE cited Nova Drywall for performing services without a contractor’s license, including a $180,400 fine based on when it started work and the number of its employees on the project. The CSLB levied a $15,000 civil penalty, its maximum, against Nova Drywall for acting in the capacity of a contractor without a license, as permitted by Bus. & Prof. Code § 7028.7. In turn, DLSE fined Onni Contracting California $10,800 for contracting with an unlicensed contractor, as permitted by Bus. & Prof. §7118. The CSLB warned that Onni Contracting California may also face CSLB administrative action and a fine for contracting with a non-licensee.

Steve Sands, the CSLB Registrar of Contractors, warned: “To perform contracting work in California, a company must be licensed by CSLB,” and “This company should not have been working until its license was in place.” In turn, Julie A. Su, the California Labor Commissioner, further warned: “Those who hire contractors are obligated to make sure they are dealing with contractors who play by the rules. If they do not, we will work with CSLB and other law enforcement to level the playing field.”

Additional Source: CSLB Breaking News: Part of $150 Million San Diego Construction Project Stopped After Discovery Of Unlicensed Subcontractor; A + B + C (40 + 30) = California Contractor License Classifications (and Subcategories); California CSLB Registrar of Contractors Announces Departure; R-E-C-I-P-R-O-C-I-T-Y ~ Find Out What It Means To You

The California Contractors State License Board posed this question in its California Licensed Contractor Newsletter, Fall 2013 edition Quick Quiz:

“Can I do anything to have my application processed right away so I can start bidding and working on new jobs?
a. Yes, but only if you send enough money to pay CSLB employees for their overtime wages.
b. Maybe, depending on the detail in your expedite request letter that describes why the rush is needed, and if the cause/situation is justifiable.
c. No, CSLB won’t consider expedites.”

Many of you may not know that the answer is “b.”

If you are an unlicensed contractor in California and you would like to bid on and to perform work that requires a California contractor’s license, if you can articulate why the CSLB should rush your application, consider submitting your license application with a letter requesting that it be expedited. There is no harm in asking. The same does not hold true if you bid for or perform work requiring a license without a license.

Additional Source: I’m gonna need to see your license…; CSLB Breaking News: Part of $150 Million San Diego Construction Project Stopped After Discovery Of Unlicensed Subcontractor; A + B + C (40 + 30) = California Contractor License Classifications (and Subcategories); R-E-C-I-P-R-O-C-I-T-Y ~ Find Out What It Means To You