The Double-Breasted Dilemma
July 18, 2022 —
Lauren E. Rankins & Saloni Shah - ConsensusDocsWhat Is A Double-Breasted Operation?
A double-breasted operation is when a firm has two entities, and one entity performs work under collective bargaining agreements and the other does not. While this type of operation is not outright prohibited, it is often subject to a variety of challenges and scrutiny. To legally run a double-breasted operation, the two companies must remain separate and distinct. If the companies are not sufficiently separate and distinct from one another, the National Labor Relations Board (“NLRB”) or a court may find that the two companies are operating as a single entity or that the non-union company, or also known as the open shop, is merely an alter ego of the union company and, therefore, bound by the terms of the collective bargaining agreement.
In order to determine whether the companies are sufficiently separate and distinct, the two entities must pass either the single employer test or the alter ego test depending on the nature of the double-breasted operation. Typically, the single employer test is used when the two entities run parallel operations, and the alter ego test is used when the open shop replaces the union company. Under the single employer test, the NLRB or courts will generally consider four factors: (1) the interrelation of operations; (2) common management; (3) common control of labor relations; and (4) common ownership. The alter ego test does not require a finding that the companies are a single bargaining unit, but analyzes to what extent the two entities have substantially identical management, business operation and purpose, business equipment, customers, and ownership. While common ownership is a factor considered under both the single employer and alter ego tests, common ownership alone is not dispositive of whether the companies are sufficiently separate and distinct. In other words, the NLRB and courts do not simply look for common ownership to determine whether the double-breasted operation is lawful. It is merely one of many factors to consider.
Read the court decisionRead the full story...Reprinted courtesy of
Lauren E. Rankins, Watt, Tieder, Hoffar & Fitzgerald, LLP (ConsensusDocs)Ms. Rankins may be contacted at
lrankins@watttieder.com
Performing Work with a Suspended CSLB License Costs Big: Subcontractor Faces $18,000,000 Disgorgement
September 17, 2015 —
Steven M. Cvitanovic & David A. Harris – Haight Brown & Bonesteel LLPIn what could lead to a draconian result, the Court of Appeal for the First Appellate District held that a contractor who performs work without a valid license can be required to disgorge all payments received, even if the contractor perfectly performed its work. The case, Judicial Council of California v. Jacobs Facilities, Inc. (Ct. of Appeal, 1st App. Dis., Div. One, A140890, A141393), involved an $18,000,000 contract between Jacobs Facilities, Inc. (“Jacobs Facilities”) and the Judicial Council of California (“Judicial Council”). In April 2006, Jacobs Facilities, a wholly owned subsidiary of Jacobs Engineering Group, Inc. (“Jacobs Engineering”) entered into a three year contract with the Judicial Counsel to maintain 121 courthouses and other judicial branch buildings throughout Southern California (the “Contract”). Jacobs Facilities contracted to provide maintenance and oversight services, while retaining subcontractors to perform the actual maintenance and repair work.
In December 2006, as part of a corporate reorganization, Jacobs Engineering started winding up Jacobs Facilities and transferred its employees to Jacobs Engineering and then subsequently to another wholly owned subsidiary called Jacobs Project Management Co. (“Jacobs Management”). The work that was performed by Jacobs Facilities was taken over by Jacobs Management. As part of the windup, Jacobs Facilities’ Contractor’s State License Board license was allowed to lapse and the license expired by operation of law in November 2008. Although Jacobs Management was now performing the work, it was not added as a party to the contract. Although it appears Judicial Council was aware of the corporate changes, it was not until November 2009 that the parties assigned the contract to Jacobs Management.
Reprinted courtesy of
Steven M. Cvitanovic, Haight Brown & Bonesteel LLP and
David A. Harris, Haight Brown & Bonesteel LLP
Mr. Cvitanovic may be contacted at scvitanovic@hbblaw.com
Mr. Harris may be contacted at dharris@hbblaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Texas Public Procurements: What Changed on September 1, 2017? a/k/a: When is the Use of E-Verify Required?
October 11, 2017 —
Timothy D. Matheny – Peckar & Abramson, P.C.Every contractor that does business with the federal government is familiar with the requirement to use of E-Verify in order to document the employability of a contractor’s employees. But, when is a contractor required to use E-Verify in Texas? And, does this requirement to use E-Verify extend to the contractor’s subcontractors? All contractors and each of their subcontractors will be required to use E-Verify for a variety of goods and services contracts with state agencies. Failure to understand these requirements could lead to your company losing out on the award of the next Texas public procurement contract.
Read the court decisionRead the full story...Reprinted courtesy of
Timothy D. Matheny, Peckar & Abramson, P.C.Mr. Matheny may be contacted at
tmatheny@pecklaw.com
Insuring Lease/Leaseback Projects
August 19, 2024 —
David G. Jordan & Jeffrey J. Vita - Saxe Doernberger & Vita, P.C.Overview
Several states utilize a unique statutory mechanism to allow school districts to finance the construction of public-school facilities. This arrangement (known as a “lease-leaseback agreement”) allows a school district to lease property to a contractor/developer, who then constructs or renovates a school facility on the property. Once the work is completed, the contractor/developer leases the school building back to the school district. The school district then makes lease payments over time, often many years, which can be structured in various ways to spread out the cost of construction. The arrangement typically requires a site lease for the land leased to the contractor/developer, a facilities lease for the lease-back of the school building to the school district and a traditional construction agreement. In some ways, the arrangement resembles a Public-Private Partnership (PPP) whereby a public entity collaborates with a private entity for the purpose of financing and delivering a project traditionally provided solely by the public sector.
Reprinted courtesy of
David G. Jordan, Saxe Doernberger & Vita, P.C. and
Jeffrey J. Vita, Saxe Doernberger & Vita, P.C.
Mr. Jordan may be contacted at DJordan@sdvlaw.com
Mr. Vita may be contacted at JVita@sdvlaw.com
Read the court decisionRead the full story...Reprinted courtesy of
Neighbors Fight to Halt Construction after Asbestos found on Property
October 15, 2014 —
Beverley BevenFlorez-CDJ STAFFSI Live reported that residents spoke out at the Staten Island, New York community board meeting to try to halt “construction taking place at former Mount Manresa Jesuit Retreat House property in Fort Wadsworth.” Barbara Sanchez, secretary of the Committee to Save Mount Manresa, stated that halting the construction is urgent now that asbestos has been discovered on the property.
"We want a full stop-work order ... Everything being done around those buildings is being blown into our homes,” Sanchez said in the meeting, according to SI Live. “So I want testing for ... everything touched by the asbestos -- and our homes, before the work continues at Mount Manresa!"
Jeanna Massimi, a resident of Fort Wadsworth, stated that people in the community are already dealing with health problems due to the construction work: “A lot of people where I live [are having] X-rays and are being tested for asbestos exposure. They can't have their bedroom windows open anymore. The dust is like soot -- it's thick. It's everywhere in the home. People are coughing, wheezing and hoarse. You end up feeling lethargic.”
Mike Gilsenan, assistant deputy commissioner at the Department of Environmental Protection, said it was “highly unlikely any dust or fibers migrated off that site. That is the best I can tell you.” But SI Live reported that he added “that the process is ‘not foolproof.’”
Read the court decisionRead the full story...Reprinted courtesy of
Lien Waivers Should Be Fair — And Efficient
February 18, 2015 —
Christopher G. Hill – Construction Law MusingsThis week for our Guest Post Friday here at Construction Law Musings, we welcome back my good friend Scott Wolfe. Scott, a thought leader in the construction industry, combines his construction background, tech experience, entrepreneurial spirit, and legal education to bring a unique perspective to the industry’s construction payment problem. Scott is the founder of zlien, a venture-backed construction payment platform. A licensed attorney in six states, his writing has appeared in the New York Times, CFMA’s Building Profits, Supply House Times, Construction Executive, and tED Magazine. He has been a Keynote Speaker for the American Subcontractors Association annual conference, and spoken at CFMA events.
Lien waivers are perhaps the most legally and practically complicated documents exchanged in the construction industry. Unfortunately, this results in huge corporate inefficiencies, and worse, provides an opportunity for some parties to exert undue leverage over others.
Lien waivers — or lien releases, as they are commonly (but mistakenly) called — aren’t supposed to be complicated, though. They are designed to make the complex construction payment process easy and fair.
This article will address why that is, how it works, and where things have gone awry.
Read the court decisionRead the full story...Reprinted courtesy of
Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Be a Good Neighbor: Protect Against Claims by an Adjacent Landowner During Construction
November 09, 2020 —
Joshua Levy & Madeleine Bailey - Construction ExecutiveThere’s nothing like working in an office while pilings are being pounded into the ground next door, leading to crashing sounds of pile driving and the attendant afternoon headaches. Fortunately, that’s often the extent of a neighboring project’s real inconvenience. In other cases, however, construction in close quarters can mark the beginning of costly and emotional disputes, which can escalate to costly legal battles during and after construction.
NUISANCE AND STRUCTURAL DAMAGE CLAIMS
Construction claims are often based on the concept of “nuisance,” or on structural damage to adjacent property. Nuisance claims are typically based on noise and dust from construction sites, while structural damage claims are based on direct physical damage caused by neighboring demolition, vibrations, excavation and dewatering. These types of claims can result in monetary damages for neighbor plaintiffs, loss of permits for contractors and reputational damage to the developer.
In one recent case in New York City, the developer faces up to $10 million in damages in a lawsuit with a neighboring property owner. The developer was conducting excavation, dewatering and installation of steel sheet piles, which the plaintiff alleges caused its five-story building to settle and shift, rendering doors inoperable and causing extensive cracking and separation of floors and ceilings from walls and supports. The plaintiff filed its complaint on Jan. 24, 2019, and the lawsuit is ongoing, exemplifying that construction claims such as these can be time consuming and costly (Complaint, 642 East 14th St. v. 644 E. 14th Realty [N.Y. Sup. Ct. January 24, 2019]).
Reprinted courtesy of
Joshua Levy & Madeleine Bailey, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Read the court decisionRead the full story...Reprinted courtesy of
Mr. Levy may be contacted at
joshua.levy@huschblackwell.com
Builders Arrested after Building Collapses in India
July 01, 2014 —
Beverley BevenFlorez-CDJ STAFFDeaths from a building collapse in Chennai, India is currently at nineteen, while forty-two people have been rescued, according to the New York Times, and “40 others are feared trapped in the debris,” reported BBC News.
The Chennai police arrested six people, “including the partners of the construction company, the architect and the structural engineer, and charged them with criminal negligence in connection with the building collapse there,” according to P. Subramniam, a Chaennai police officer, as quoted by the New York Times.
"It appears they have not adhered to approved plans,” Tamil Nadu Chief Minister J Jayalalithaa told BBC News. “The building appears to have serious structural defects."
Building collapses are frequent in India, and most are “blamed on lax safety and substandard materials,” reported BBC News. The New York Times pointed out that “municipal authorities rarely condemn buildings even when they appear to have dangerous defects.” Regardless, “even unsafe buildings attract people who want to live in them because the competition for shelter is fierce among millions of city residents.”
Read the full story, New York Times...
Read the full story, BBC News... Read the court decisionRead the full story...Reprinted courtesy of
