The Utility of Arbitration Agreements in the Construction Industry
December 30, 2019 —
Brian L. Gardner & Jason R. Finkelstein - Construction ExecutiveIn today’s ever-evolving world of employment law, it is far from an easy task for construction industry employers to operate their business while successfully navigating all of the potential legal potholes that continue to abound and multiply seemingly with every passing day. This is particularly true in the face of the onslaught of claims lodged by current and former employees in recent years for alleged unpaid wages. While there may not be a “sure bet” way of avoiding such claims, one tool that employers should strongly consider in their arsenal are arbitration and class action waiver agreements.
To that end, last year, the United States Supreme Court rendered its ground-breaking decision in Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018). In Epic Systems, the Supreme Court held that arbitration agreements containing class and collective action waivers of wage and hour disputes are enforceable. At the time of the decision, a split of authority existed among courts across the country as to whether such agreements were viable. On the one hand, several courts contended that class waivers unfairly violated employees’ rights to collectively bargain under the National Labor Relations Act. On the other hand, many other courts were finding that such agreements were fully enforceable and supported by the policies promoted under the Federal Arbitration Act. The Epic Systems Court sided with this latter viewpoint, concluding that the FAA’s clear policy promoting arbitration as a dispute resolution mechanism and private parties’ rights to freely negotiate contracts outweighed any potential arguments against such agreements under the NLRA.
With wage and hour lawsuits being filed against construction industry employers practically daily, the Epic Systems decision is critically important. Construction employers can now freely enter into arbitration and class waiver agreements with their laborers and thereby potentially limit the cost, expense and exposure of fighting such actions in a public forum on a collective or class-wide basis. To be clear, such agreements will not eliminate employees from bringing such wage and hour claims entirely, nor should the use of those agreements signal to employers that they need not make every good-faith effort to comply with their obligations under the Federal Labor Standards Act and/or any applicable state wage and hour laws. But the reality is that arbitration and class waiver agreements can work to avoid tens or hundreds or even thousands of employees from banding together in some of the massive wage and hour lawsuits being filed across the country. Instead, employers can require that those legal battles be conducted by a single plaintiff in a more controlled environment before an arbitrator (or panel of arbitrators).
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Brian L. Gardner & Jason R. Finkelstein, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
Mr. Gardner may be contacted at bgardner@coleschotz.com
Mr. Finkelstein may be contacted at jfinkelstein@coleschotz.com
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Angelo Mozilo Speaks: No Regrets at Countrywide
September 03, 2014 —
Max Abelson – BloombergSix years after he lost control of the largest mortgage lender in the U.S., and days after news that the U.S. Attorney’s Office in Los Angeles plans to sue him, the Countrywide Financial Corp. founder is baffled by a new effort to punish him, proud of past triumphs and incensed by criticism.
“You’ll have to ask those people, ‘What do you have against Mozilo, what did he do?’” he said in a 30-minute call with Bloomberg News before Labor Day, one of his few interviews since the firm’s downfall. “Countrywide didn’t change. I didn’t change. The world changed.”
Interviews with Mozilo, 75, and three friends show what retirement looks like for a chief executive officer linked to the worst financial crisis since the Great Depression. Remaining out of public view like Lehman Brothers Holdings Inc.’s Richard Fuld or Jimmy Cayne of Bear Stearns Cos., Mozilo has submitted plans for Old West-style offices in California, taught students in Italy about finance, invested in a building in the Arizona desert that houses a Taco Bell and written about his life so that his grandchildren will “know the truth.”
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Max Abelson, BloombergMr. Abelson may be contacted at
mabelson@bloomberg.net
Good News on Prices for Some Construction Materials
June 28, 2021 —
ABC - Construction ExecutiveThe elevated price of softwood lumber, a major talking point during much of the pandemic, appears to have peaked in early May at more than $1,700 per thousand board feet. As of June 23, the price has fallen below $900 per board feet, down about 49% in less than two months.
That’s still an unusually lofty price by historic standards—prices remain almost twice as high as in February 2020—but the trend is very much in the right direction. Builders that had been hoarding lumber have now begun to sell from their own inventory, other builders have delayed lumber purchases in anticipation of lower prices and sawmill operators have been adding shifts, as well as expanding capacity, all of which puts downward pressure on prices.
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ABC, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Ninth Circuit Affirms Duty to Defend CERCLA Section 104 (e) Letter
October 10, 2013 —
Tred Eyerly — Insurance Law HawaiiThe Ninth Circuit held there is a duty to defend not only a PRP letter issued by the EPA, but also a section 104 (e) letter. Anderson Brothers, Inc. v. St. Paul Fire and Marine Ins. Co., 2013 U.S. App. LEXIS 18156 (9th Cir. Aug. 30, 2013).
The insured received two letters from the EPA notifying it of potential liability under CERCLA for environmental contamination of the Portland Harbor Superfund Site. The first letter was received in January 2008, and stated that the EPA sought the insured's cooperation in its investigation of the release of hazardous substances at the site. The letter enclosed an extensive, 82-question "Information Request" seeking information about the insured's current and former activities at the site. The letter informed the insured that its voluntary cooperation was sought, but compliance with the Information Request was required by law and failure to respond could result in an enforcement action and civil penalties of $32,500 per day. The insured tendered the 104 (e) letter to St. Paul and requested a defense and indemnity pursuant to the CGL policy. St. Paul declined to provide a defense because the letter did not constitute a "suit," which was required by the policy to trigger the duty to defend.
The second letter from the EPA, received in November 2009, was entitled "General Notice Letter for the Portland Superfund Site" and notified the insured that it was a "potentially responsible party ("PRP").
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Tred EyerlyTred Eyerly can be contacted at
te@hawaiilawyer.com
Seller Faces Federal Charges for Lying on Real Estate Disclosure Forms
October 02, 2015 —
Beverley BevenFlorez-CDJ STAFFHomeowners Glenn and Kathryn Jasen allegedly mislead buyers Kelly Magbee and family when they checked “no” on questions regarding sinkhole activity on real estate disclosure forms, according to On Your Side News. Furthermore, “Citizens Property Insurance Co. failed to file a sinkhole certification on a Spring Hill home in 2009. The company slipped the form into county records five years later- in Sept. 2014 – after questions from 8 On Your Side.”
If the insurance company had filed the sinkhole documentation, then the Magbees would have been told about the sinkhole prior to the purchase of the home. According to On Your Side News, Magbee and family moved out of the home “after a crack opened in the living room.”
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Turmoil Slows Rebuilding of Puerto Rico's Power Grid
August 28, 2018 —
Associated Press - Engineering News-RecordSAN JUAN, Puerto Rico (AP) — Ten months after Hurricane Maria destroyed Puerto Rico's electric grid, the local agency responsible for rebuilding it is in chaos and more than $1 billion in federal funds meant to strengthen the rickety system has gone unspent, according to contractors and U.S. officials who are anxious to make progress before the next hurricane.
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Engineering News-RecordENR may be contacted at
ENR.com@bnpmedia.com
Appellate Court Endorses Discretionary Test for Vicarious Disqualification of Law Firms Due To New Attorney’s Conflict
February 07, 2018 —
David W. Evans and Stephen M. Tye – Publications & Insights In
California Self-Insurer’s Security Fund et al. v. The Superior Court of Orange County (1/26/2018 – No. G054981), the Fourth Appellate District considered whether vicarious disqualification of a law firm is mandatory or discretionary where an attorney with a conflict joins a firm and the firm enacts an ethical screen to prevent transmission of confidential information between the new attorney and the rest of the firm.
This case arose from an effort by the California Self-Insurer’s Security Fund (the “Fund”) to be reimbursed for workers’ compensation benefits advanced on behalf of the Healthcare Industry Self-Insurance Program (the “Program”). The Fund hired Nixon Peabody LLP (“Nixon Peabody”) to represent it in connection with this matter. In November 2013, represented by members of Nixon Peabody’s San Francisco office, the Fund filed a lawsuit naming 304 members of the Program as defendants. Approximately 170 defendants have since settled.
Two of the non-settling defendants (“Moving Parties”), were represented by Michelman & Robinson, LLP (“M&R”). From approximately 2009 until February 1, 2017, attorney Andrew Selesnick served as Chair of M&R’s Health Care Department at the firm’s Los Angeles office, managing a team of attorneys who represented clients in the healthcare industry. Commencing in 2014, a team of four attorneys at M&R, including Selesnick, represented the Moving Parties and four other defendants, the latter of whom have since settled. Selesnick was actively involved, including participating in a confidential discussion pertaining to Moving Parties’ liability and damages and receiving many e-mails containing communications about the common defense of the remaining 170 defendants.
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David W. Evans, Haight Brown Bonesteel and
Stephen M. Tye, Haight Brown Bonesteel
Mr. Evans may be contacted at devans@hbblaw.com
Mr. Tye may be contacted at stye@hbblaw.com
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Florida’s Construction Defect Statute of Repose
August 24, 2017 —
David Suggs – Bert L. Howe & Associates, Inc.Butler Weihmuller of Katz Craig LLP discussed Florida’s 10-year statute of repose law: “Under § 95.11(3)(c), the action must commence within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.”
However, Weihmuller explains that parties may disagree on the specific date For instance, in Busch v. Lennar Homes, LLC, Florida’s 5th DCA recently “reversed a trial court’s dismissal of a homeowner’s construction defect claim that was filed just beyond 10 years after the closing date on the property.” The previous decision had been based on the notion that the contract had been completed upon the date of closing. The 5th DCA declared that “a contract is not completed until both sides of a contract have been performed” and “pointed to the ‘inspection and punch-list clause’ of the contract.” The clause indicated that “[a]ny remaining items that Seller has agreed to correct will be corrected by Seller at Seller’s sole cost and expense prior to closing or at Seller’s option within a reasonable time after closing.” Since not all punch-list items had been completed prior to closing, the 5th DCA held that the contract had not been completed at closing, and therefore the statute of repose did not begin until the punch-items had been accomplished.
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