Winter/Spring 2021

RELIABILITY. EQUIPPED FOR

No matter how big or small the job, you can depend on the equipment and people at Sunstate Equipment. With a wide selection of equipment, tools, and accessories, we empower you to get the job done on time, every time. From general construction needs to HVAC, electrical, welding, landscaping, paving, and more, we work hard to earn your trust every day. For more than 40 years, we’ve made successful relationships a priority, allowing our customers to build upon our foundation of service and expertise.

8

EORGIA

CONSTRUCTION TODAY

F E A T U R E S

Workplace Law Developments to Expect Under a Biden Administration

As changes are being made to workplace regulations, employers need to learn how they will impact their businesses.

12 AGC’s Hiring and Business Outlook Survey: A Closer Look

A recent survey by AGC of America reveals how contractors expect the industry will fare in 2021, as a result of the pandemic that continues – more than a year later – to have significant business impacts.

15 What Will Capitol Hill Do Next?

A deeper look into infrastructure, taxes, safety regulations, labor and much more.

17 COVID-19’s Impact on Construction: Is There a Remedy? Time Extension, Force Majeure or More?

With an anticipated increase of disputes among owners, contractors and suppliers due to COVID-19, take the opportunity now to consider the implications of your contracts.

Publisher: Heather Greyling

Content Strategist: Jeanie J. Clapp

Project Manager: Adam Lingenfelter

Publication Director: Ryan Griffin

Marketing Specialist: Erin France

Chief

Officer: Michael T. Dunham Director of Communications & Marketing: Alyson B. Abercrombie, CAE

Advertising Sales: Brian Agnes, Stephen Cofino, Beverly Grimme, Bill Lovett, Jacqueline McIllwain, Stephanie Musial, Marjorie Pedrick, Debbie Phillips, Raymond Strickland, Jason Zawada

Project Coordinator: Cindy Samons

Layout & Design: Mahender Veer

©2021 Naylor, LLC. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

PUBLISHED MARCH 2021/GGC-B0121/1801

COVER IMAGE: EAMESBOT/SHUTTERSTOCK.COM

JOHN T TAKAI/SHUTTERSTOCK.COM

The light at the end of tunnel appears to be shining br ighter. I have never been prouder to work in the construction industry and be part of AGC Georgia. I sincerely hope you are continuing to allow yourself and your team members the grace needed to get through these unprecedented times. We must remember everyone needs time to recharge and so many of us have a responsibility to help family members and neighbors which need us a little more right now.

I see and hear about so many doing their part to keep the industry thriving and driving Georgia’s economy. Through the dedication of thousands upon thousands of construction professionals who are both on the front lines of our projects and those working hard at our company offices, we continue to make the most of being deemed an essential industry. The past year has been a great testimony to proving how vital careers in construction are and why more and more people should consider rewarding opportunities in our industry.

While we weren’t able to host our full line up of popular high school construction student competitions known as Skills Challenges during the fall of 2020, I’m beyond excited about attending this year’s series. Our regional contractor champions are growing the series from five to seven events. Our high school construction instructor partners tell us to plan for record participation for both competitors and student observers. Check out the provided dates and plan to join me and our future workforce at an event. Let us know if you can support one or more of them!

The 2021 session of the Georgia General Assembly is in full swing and Mark Woodall is at the capitol with a singular focus – serving as AGC Georgia members’ voice for pro-business legislation. He’s also working hard to educate legislators on the importance of funding construction curriculum in our public schools. A thriving economy can’t be sustained without a robust talent pool to help build Georgia.

Our team has kept many facets of our services moving forward, including Young Leadership Program and Executive Alliance programming, education courses, along with committee and shared interest groups.

Over the last six months, our staff has also worked through numerous hurdles due to their office space renovation. It had not undergone a full-scale update of major systems and finishes since the association bought the building in 2000. Now that the staff is no longer working from the education center, construction crews are updating that area with an expected completion date of May 2021. I hope you’ll visit the AGC Georgia team in the near future along with our new neighbor – the CEFGA team, who now works to implement their impressive workforce initiatives from our second floor.

C. David Moody, Jr. Chief Executive Officer C.D. Moody Construction Co., Inc. 2020-2021 President AGC Georgia

Those who know me know how much I enjoy getting together with friends and family. It is long overdue for our AGC Georgia family to be able to resume our major events schedule. As you can see, our amazing staff is working hard to host in-person events in the very near future. I hope you will make plans with your colleagues to join us!

Metro Amerson Supervisors’ Safety Award Ceremony

April 23, 2021

Governor’s Gun Club – Kennesaw

Young Leadership Program’s Golf Classic

May 5, 2021

Braelinn & Flatcreek Country Clubs – Peachtree City

Annual Convention

June 13-16, 2021

Florida

Metro Members First Networking Event

September 15, 2021

Truist Park’s Hank Aaron Terrace

Political Action Committee Sporting Clays Fundraiser

October 15, 2021

Garland Mountain – Waleska

Fall Leadership Conference

October 21-24, 2021

The Omni Grove Park Inn – Asheville, NC

Young Leadership Program Sporting Clays Fundraiser

November 12, 2021

The Meadows Gun Club – Forsyth

AGC Georgia Marketplace

November 17, 2021

Sonesta Gwinnett Place – Duluth

In addition to the above meetings, seven Members First events will be held in cities around Georgia in March/April and August 2021.

2021 Skills Challenge Series

Gainesville – October 27

Macon – October 28

Cedartown – November 1

Savannah – November 2

Moultrie – November 9

Metro – November 16

Augusta – November 18

WORKPLACE LAW DEVELOPMENTS TO EXPECT UNDER A BIDEN ADMINISTRATION

By D. Albert Brannen Partner, Fisher Phillips, LLP

Joe Biden is now our nation’s 46th president and both houses of Congress are controlled by Democrats. We have already seen glimpses of who the President will appoint to key positions and what policies he and the Congress will try to implement. This article offers some predictions about the dramatic changes to expect in the area of workplace law over the next few years.

Labor Relations

President Joe Biden promised to be “the most pro-union President” in the history of the United States. If his actions in his first few weeks are any indication, he will fulfill this promise!

In his first days in office, Biden summarily sacked the NLRB’s General Counsel and Assistant General Counsel. He also signed an Executive Order in which he wrote it is “the policy of the United States to encourage union organizing and collective bargaining.”

Simply put, a Biden presidency will return us to the pro-labor agenda that was a hallmark of the NLRB under the Obama administration, and a corresponding reversal of pro-employer initiatives implemented by the agency

Biden can be expected to return the NLRB to a Democratic majority by this summer. At that point, the agency is likely to set its sights on overturning a slew of decisions and regulations that have swung back and forth like a pendulum dating back to the Clinton administration. Among those issues for priority review are:

• accelerated “quickie election” procedures and timetables that had made it easier for unions to organize;

• rigid standards regulating handbook rules governing social media, electronic communication systems, recordings in the workplace, union access rights and workplace conduct; and

• agency doctrine invalidating class waivers within binding arbitration agreements.

In the meantime, the new administration supports the Protecting the Right to Organize (“PRO”) Act, which passed the House along partisan lines in February 2020. A refined PRO Act of 2021 has already been introduced in the House. This unabashedly pro-union bill reads like a “wish list” for big labor and, if signed into law, will potentially bring about the greatest shift of balance on the labor relations front since the Taft-Hartley Act of 1947. Among its many components are provisions that would:

• preempt state right to work laws;

• establish “quickie elections” along with new procedures intended to give unions procedural advantages;

• change the definition of “supervisor” to give more workers union representation;

• adopt the California “ABC” independent contractor rule;

• restore the definition of “joint employer” to the one adopted by the Obama-era Labor Board;

• bar class action waivers and arbitration agreements;

• create a civil cause of action for unfair labor practices;

• institute costly financial (and even criminal) penalties for labor law violations;

• replace secret ballot representation elections with the concept of “card check;

• give striking workers greater protections and limit employer use of lockouts; and

• impose collective bargaining agreements on employers in the absence of mutual agreement.

In this soon-to-be pro-union environment, employers should expect more aggressive union organizing and union win rates could reach record levels.

Workplace Safety

Workplace safety issues related to the ongoing pandemic are at the top of Biden’s agenda since assuming office. Biden has been extremely critical of the Trump administration’s reliance on existing statutory and regulatory tools, such as the Occupational Safety and Health Administration’s (OSHA’s) general duty clause, to maintain safe workplaces.

In an Executive Order Biden charged OSHA to increase enforcement of existing agency standards and to consider adoption of a mandatory emergency standard, which will likely require employers to develop and submit a workplace safety plan.

Biden will likely reinstate an Obama-era workplace safety reporting rule that was slated to go into

effect in 2017 but was abandoned when Trump took office to force certain employers to report detailed injury and illness information (including OSHA 300 Logs) to OSHA. The agency would then make the information available to the public by posting it online. Biden championed this rule as a means for OSHA inspectors to more readily identify dangerous working conditions and, in turn, put pressure on businesses to comply with workplace safety laws. Most employers are accustomed to reporting certain injuries and illnesses to OSHA, but the public disclosure aspect of Biden’s proposed rule will not receive a warm reception.

Look for a steady increase in the amount of penalties issued by OSHA for safety-related infractions. OSHA watchdogs have been particularly critical of the amount of penalties issued during the pandemic.

Wage and Hour Law

Expect to see a push for a $15 minimum wage on the national level – an increase from $7.25 per hour. One of Biden’s campaign promises called for an increase to $15 by the year 2026, so we can expect to see him push for legislative efforts to move in that direction. In fact, soon after his inauguration Biden signed Executive Orders increasing the minimum wage for federal workers to $15 per hour and charting a path for doing the same for employees of federal contractors. Following Biden’s lead, the Raise the Wage Act of 2021 was introduced in Congress in late January to raise the minimum wage to $9.50 in 2021 and then in steps each year until it reaches $15 per hour by 2025, with automatic cost of living indexing for future increases.

Employers should brace themselves for enhanced penalties and enforcement actions targeted at employers who do not comply with the wage hour laws under the Biden administration.

Biden’s agenda might also include increased federal regulation designed to protect workers such as a national wage-theft protection act which could include both notice and recordkeeping requirements.

A Biden administration is also likely to take steps to limit mandatory arbitration and class action waivers in the employment and wage hour context.

Pay Equity

Democrat control is likely to result in pay-equity legislation passed at the federal level. The U.S. House passed the Paycheck Fairness Act in 2019 but the Senate took no action on the bill. The bill’s stated purpose is to address wage discrimination on the basis of sex and reduce the gender pay gap. If passed, it would amend the Fair Labor Standards Act to:

• restrict the use of the “bona fide factor” defense to wage discrimination claims,

• enhance non-retaliation prohibitions,

• make it unlawful to require an employee to sign a contract or waiver prohibiting the employee from disclosing information about the employee’s wages, and

• increase civil penalties for violations of equal pay provisions.

Biden supports passage of this proposed bill and vowed to sign it into law if passed.

We can also expect to see the Biden administration reinstitute the federal EEO-1 “Component 2” reports that require employers to collect and turn over pay data and hours-worked information to the government. This federal initiative was originally adopted during the Obama years and only briefly took effect before being ended by the Trump administration.

Employee Benefits

Biden promises a rigorous defense and expansion of the Affordable Care Act. Although the U.S. Supreme Court heard oral arguments in an ACA

case on November 10 and a decision on the statute’s fate is expected by this spring, Biden pledges to preserve pre-existing condition guarantees regardless of the Court’s ruling. He has also promised to build on other aspects of the ACA – specifically, with “Bidencare” he aims to give individuals more choice, reduce health care costs, and make health care easier to navigate.

Biden’s retirement plan policy looks to “equalize” the tax breaks of retirement savings for low and middle- income workers through tax credits. This could mean bad news for workers in the middle and upper tax brackets. He also wants to expand opportunities for small businesses to help their workers save for retirement.

Employee Leaves

Biden has a history of supporting family and medical leaves for employees but he may not be willing to go as far as some progressive activists and lawmakers would like.

The paid-leave program supported by Biden during the campaign calls for legislation that would provide 12 weeks of paid leave for all workers for their own or a family member’s serious health condition. However, Biden has thus far stopped short of fully endorsing a Democratic-sponsored proposal – the FAMILY Act – that would require paid leave for a broader list of situations.

Restrictive Covenants

While non-competition agreements are not currently governed by any national law, it is still an area the Biden’s administration may consider regulating. Last year, a bipartisan pair of senators, Todd Young (R-Ind.) and Chris Murphy (D-Conn.), introduced the Workforce Mobility Act of 2019. This federal legislation was designed to substantially limit the use of non-compete agreements. Democrats have typically been more apt to call for limits on the use of

restrictive covenants that they perceive as impeding employee mobility, and especially in light of the pandemic and the massive unemployment rate, it would not be surprising to see the new Congress and President Biden team up to implement a national approach to non-competition.

Global Immigration

Immigration was one of the highest-profile issues on the docket when Trump was elected in 2016, but things will be different in the Biden administration. Biden’s proposed immigration policies were defined in detail on his campaign website – and they largely seek to reverse most, if not all, of Trump’s immigration policies. In his first days in office, Biden authored at least four significant Executive Orders impacting immigration and the workplace. He ordered withdrawal of all pending new rules and advised agencies to consider postponing effective dates for regulations that have been published but not yet become effective; reversed the “Muslim Ban” policy; ended “wall” funding; ceased controversial border policies such as family separation, and reinstated protections for “Dreamers” and those with Temporary Protected Status. We can also expect the Biden administration to review enforcement priorities and actions by federal immigration agencies, create employment options for seasonal and high-skilled workers, address gaps in immigrant visa backlogs, and provide microeconomic immigration support for municipalities.

The Biden administration touts its plans to work with the new Congress to seek long-awaited comprehensive immigration reform and recently proposed the U.S. Citizenship Act of 2021. Among other things, that proposed bill would create an earned roadmap to citizenship, take steps to keep families together, embrace diversity, promote immigrant and refugee integration and citizenship

and enhance the employment verification process.

Affirmative Action and Government Contractors

Expect to see some very significant developments for federal contractors – including more reporting requirements – under the Biden administration. For example, the new administration will likely resurrect

that were approved under President Obama. Under this program, federal contractors had to voluntarily report workplace law violations so that government contracts would be awarded with full knowledge of a company’s compliance history. There will be a higher emphasis on Diversity, Equity, and Inclusion programs.

As of this writing, Biden had already signed a record-setting 30 Executive

Continued on page 14

AGC’S HIRING AND BUSINESS OUTLOOK SURVEY: A CLOSER LOOK

The Associated General Contractors of America and Sage Construction and Real Estate recently released the 2021 construction hiring and business outlook survey. It revealed that few construction firms will add workers in 2021 with many firms struggling with declining job opportunities and many other obstacles. The findings are detailed in The Pandemic’s Growing Impacts on the Construction Industry: The 2021 Construction Hiring and Business Outlook Report. (https://bit.ly/3qukHoo)

“The outlook for the industry could improve, however, if federal officials are able to boost investments in infrastructure, backfill state and local construction budgets and avoid the temptation to impose costly new regulatory barriers,” said Steve Sandherr, AGC of America’s chief executive officer. “But, even as we work to advocate for measures to rebuild demand for construction, we also need to take longer-term steps to continue developing the construction workforce.”

That said, most contractors expect demand for many types of construction to shrink in 2021 even as the pandemic is prompting many owners to delay or cancel already-planned projects, meaning few firms will hire new workers.

“This is clearly going to be a difficult year for the construction industry,” said Sandherr. “Demand looks likely to continue shrinking, projects are getting delayed or canceled, productivity is declining, and few firms plan to expand their headcount.”

The percentage of respondents who expect a market segment to contract exceeds the percentage who expect it to expand – known as the net reading – in 13 of the 16 categories

of projects included in the survey. Contractors are most pessimistic about the market for retail construction, which has a net reading of negative 64 percent. They are similarly concerned about the markets for lodging and private office construction, which both have a net reading of negative 58 percent.

Other construction categories with a high negative net reading include higher education construction, which has a net reading of negative 40 percent; public buildings, with a net negative of 38 percent, and K-12 school construction which has a net reading of negative 27 percent.

Among the three market segments with a positive net reading, two –warehouse construction (+4 percent) and the construction of clinics, testing facilities and medical labs (+11 percent) – track closely with the few segments of the economy to benefit from the impacts of the coronavirus.

Firms report that many of their already-scheduled projects have either been delayed or canceled. Fifty-nine percent of firms report they had projects scheduled to start in 2020 that have been postponed until 2021. Forty-four percent report they had projects canceled in 2020 that have not been rescheduled. Eighteen percent of firms report that projects scheduled to start between January and June 2021 have been delayed. And 8 percent report projects scheduled to start in that time frame have been canceled.

Few firms expect the industry will recover to pre-pandemic levels soon. Only one-third of firms report business has already matched or exceeded year-ago levels, while 12 percent of firms expect demand to return

to pre-pandemic levels within the next six months. Fifty-five percent report they either do not expect their firms’ volume of business to return to pre-pandemic levels for more than six months or they are unsure when their businesses will recover.

Only 35 percent of firms report they plan to add staff this year. Meanwhile, 24 percent plan to decrease their headcount in 2021 and 41 percent expect to make no changes in staff size. Firms do vary by region in their hiring outlook. In the South, the percentage of firms that expect to add employees – 39 percent – is more than double the percentage that expect to reduce headcount – 17 percent. The outlook among firms in the Northeast is nearly opposite: fewer than one-quarter of respondents expect to increase their headcount in 2021 while 41 percent foresee a reduction.

Despite the low hiring expectations, most contractors report it remains difficult to fill some or all open positions.

“The unfortunate fact is too few of the newly unemployed are considering construction careers, despite the high pay and significant opportunities for advancement,” said Ken Simonson, the association’s chief economist. “The pandemic is also undermining construction productivity as contractors make significant changes to project staffing to protect workers and communities from the virus.”

Officials with Sage noted that firms are being more strategic about information technology as they try to remain competitive in the current environment. Sixty-two percent of contractors indicate they currently have a formal IT plan that supports business objectives, up from

The 2021 Construction Hiring and Business Outlook report was based on survey results from more than 1,300 firms from all 50 states, plus Puerto Rico and the District of Columbia. This article speaks to cumulative data gathered from contractors across the nation. The charts specifically represent a sampling of responses from only Georgia contractors. To view the full data set of Georgia-specific responses, please visit https://bit.ly/2Kqg7rS.

What’s the expectation on project dollar value versus last year?

Higher Lower Same Net*

What changes are expected in your firm’s headcount in 2021?

*Net equals difference between number of “Higher” and “Lower” responses as percent of total.

48 percent last year. An additional 7 percent plan to create a formal plan in 2021.

Sandherr said the association is addressing the workforce challenge by crafting a new plan that focuses on continued advocacy, helping its 89 chapters’ staff and members establish or improve training programs and launching a new, national workforce recruiting effort called “Construction is Essential.” It will use targeted digital advertising to complement and build on the many existing local and regional construction workforce campaigns, including the robust efforts already in place with AGC Georgia.

Mike Dunham, AGC Georgia’s chief executive officer, said, “While we are fortunate to have Georgia’s construction industry keep working through the pandemic, we know contractors are desperate to return to some normalcy that helps with morale, workflow, scheduling and so much more. Together with our colleagues and partners at AGC of America, our team’s objective is to make sure contractors end 2021 on a far better note than many are starting it.” ■

Do you expect changes in hourly craft or salaried personnel availability in 2021?

When do you expect your firm’s business volume to return to pre-pandemic normal?

Did your firm increase or decrease pay or benefits in 2020?

Orders since his inauguration. Keep in mind that these Executive Orders governing government contractors can be eliminated or implemented simply with a stroke of Biden’s pen.

Employee Privacy and Data Security

We expect Biden and Democrats to push for federal privacy legislation favoring consumer rights, borrowing to some extent from California’s CCPA. At a minimum, a new federal law would establish transparency and data access requirements, forcing many businesses to change their approach to handling personal data. In fact, Senate Democrats have already introduced their own privacy legislation that would head down this road.

Did you have any projects scheduled to start in 2020 or 2021 postpone or cancel?

Employee Misclassification Issues

While the Trump Department of Labor released regulations to make it harder for workers to claim they are joint employees of multiple organizations and easier for hiring entities to classify workers as independent contractors, Biden’s campaign platform said he will put a stop to employers intentionally misclassifying their employees as independent contractors. You can expect his administration to drive an aggressive, all-hands-on-deck enforcement effort to curb misclassification. This will likely involve multiple federal agencies working in tandem with state tax, employment, and labor agencies to identify and address disputes.

Conclusion

Changes in workplace law are coming at light-speed this year. Employers need to monitor developments and take prompt action to insure they remain in compliance with existing laws and with these upcoming changes. ■

D. Albert Brannen is a partner of Fisher Phillips. For further information contact him at dabrannen@fisherphillips.com or 404-240-4235.

WHAT WILL CAPITOL HILL DO NEXT?

By A. D. Thomson

Adapted from the January/February 2021 issue of Constructor, a publication of AGC of America. Reprinted with permission

Pundits, comics and the year’s wittiest t-shirts may have proclaimed 2020 a dumpster fire, but despite its unprecedented challenges, many contractors found favor in this, the Year of Our Pandemic. Some pivoted toward success. Others, in economy segments less COVID-19-tolerant, suffered.

Regardless, in the wake of an exhausting election cycle, AGC of America and its members are looking toward a fresh start.

“We are ready to work with the new administration and Congress to help craft an agenda that is focused in rebuilding infrastructure and reviving the national economy,” said Steve Sandherr, the association’s CEO, in a post-election statement, citing highway and transit law, COVID-19-related liability reform and industry-stimulating tax measures among the desired outcomes of these new partnerships.

AGC of America’s legislative team is sharing what may be in store for 2021 and what members can do to prepare.

Nation Building

“Bright spots” were shining amid Murphie Barrett’s prognosticative chat on an AGC webinar. Barrett is the association’s vice president of Congressional relations, infrastructure advancement, and her reports included positive takes – one of them a recent one-year extension of the FAST Act (for Fixing America’s Surface Transportation), much of which she credited to AGC’s own grassroots efforts by members.

“[Having this certainty] is pivotal to the construction industry in

light of the pandemic which we are all still dealing with,” said Barrett, noting that it’s a departure from the three-to-six-month extensions generally afforded such legislation. “We were able to make a really compelling case for one year.”

The Water Resources Development Act, too, was seeing bipartisan support at the time of this writing.

“Hopefully, we’ll have another bill there in terms of improving the nation’s infrastructure,” says Barrett, noting the process serves as a reminder to members of both houses “that you can really get things done when you work in a bipartisan, bicameral manner.”

Also encouraging: a $287 billion reauthorization of the Federal Aid Highway Program that would run another five years along with the possible reauthorization of the Invest in America Act.

“This would potentially mean $494 billion over five years not only for what we’ve traditionally seen in surface bills in terms of highways, bridges and public transit systems, but would also provide significant levels of investment for passenger rail systems.”

The ideas have seen similar support among ranking Democrats and Republicans.

“Thematically what we’ve seen from these proposals,” says Barrett, “is emphasis on both addressing the needs for urban and rural areas dealing with climate change, both in terms of improving resiliency and reducing greenhouse gas emissions, expediting the delivery of projects and incorporating innovation and other forms of transportation technologies to really make sure that this infrastructure

is operating in a safe and efficient manner.”

Will the Taxman Cometh?

He always does, of course. But will he come for more this year?

“Before the election, my prediction was that taxes would almost certainly go up,” said Matt Turkstra, director, Congressional relations, tax, fiscal affairs and accounting for AGC of America, “but now I think it’s a little more cloudy.”

It comes down to what Turkstra literarily refers to as “a tale of two Senates.”

“There’s such a huge and stark divide between the two parties,” he says, “I think we could make the argument that who is in control is more important with regard to taxes than any other issue we might discuss.”

Republicans passed sweeping changes in 2017 using a budget reconciliation maneuver “for the Affordable Care Act, the Bush tax cuts in 2001 and again in 2003…and you only need 51 votes in order to enact tax changes and in some cases some pretty hefty spending changes.”

Many of the changes – the Bush-era tax cuts and a significant portion of those made by President Trump – were enacted on a temporary basis.

“You can’t have a loss of revenue outside of the budget window,” Turkstra explains. “It’s all about the budget window when it comes to reconciliation.”

Smaller firms with concerns over payback of 2020 Paycheck Protection Program (PPP) loans will likely be required to navigate robust applications associated with loan forgiveness, but Turkstra says heightened scrutiny is typically associated with loans above the $2 million threshold.

Relationships are Forever, Regulations Aren’t

Much in the way the Obama administration saw some of its regulatory changes undone following President Trump’s election, so, too, may the outgoing team see changes with President Biden in the Oval Office.

“You can expect a lot more enforcement actions coming from agencies like OSHA, the EPA and others across the spectrum,” says Jimmy Christianson, AGC of America’s vice president, government relations.

That said, he notes, the federal rulemaking process is long, with myriad steps.

“There are many avenues where we as an association and an industry can provide input and assert our legal rights…and much of that litigation and research comes from our construction advocacy funds, which is why that is such an essential tool and will be over the next four years.”

Regardless of how long a given politician is in office – one, two, four, eight years – Christianson is quick to remind members that career services posts are held by professionals who remain in place for decades.

“We continue to maintain relationships with those folks…and they want to hear from us, because we bring credibility when we make our case.”

Even so, the same Congressional Review Act that permitted President Trump and the Republican-led Congress to repeal 15 of the Obama administration’s late-term regulations could allow the same for the President Biden.

“The rulemaking process is like whittling wood with a needle,” Christianson explains, citing President Trump’s rollback of the WOTUS (Waters of the United States) rule and its federal protections for rivers and lakes, which took roughly four years to take effect. “The Congressional Review Act is more like dynamite. “Once you repeal a rule through the Congressional Review Act, the agencies can no longer put

forth a substantial or similar rulemaking…it’s a really blunt tool.”

Sandherr offers context.

Four years ago, [AGC of America was] giving members of Congress ideas on what Obama-era rules fit into the time slot, making them eligible for repeal under the Congressional Review Act. Now, we’ll be playing defense on some of these rules.”

Labor Pains and Promise

The PRO Act, “a unionizing wish list,” – as Jim Young, AGC of America’s senior director of Congressional relations for labor, HR and safety, calls it –has strong Democratic support and even if not voted on for passage by Congress right away, elements of the legislation can be accomplished by executive order and the regular regulatory process.

But the news isn’t all bad, as is the case with multi-employer pension reform composite plan provisions.

“[AGC of America has] done a particularly good job in educating the leadership in Congress on this. We’re cautiously optimistic on the future of this conversation.”

On the flipside of labor, President Biden’s stance on immigration reform could prove beneficial for people who had difficulty with their documentation three to four year ago. This could help the industry with labor supply.

A potential focus on education –both higher and K-12 – for families earning less than $125,000 annually, could also be a legislative win since it should help people who want to hire.

Going Viral, Still Lingering,

too, will be the effects of COVID-19, which we’re still in the middle of, and some feel it hasn’t been all bad for the industry – depending on what market segments you serve. Data centers and logistics have been busy. Other segments like sports, entertainment, hospitality and aviation are lagging in many regions.

While the industry’s crystal ball for 2021 is a bit murky, professionals

continue to hope for a return to some normalcy in the latter half of the year. ■

OSHA in 2021 and Beyond

Ever vigilant, AGC of America keeps tabs on OSHA as it rules on actions related to commercial contracting. Kevin Cannon, the association’s senior director, safety & health services, outlined in a recent webinar what may be heading construction’s way.

• COVID-19 Emergency Temporary Standard. This will likely be based on current public health protocol.

• Update to Table 1 Silica Standard. This would increase compliance and worker protection.

• Heat Illness Prevention Act. This legislative language suggests that OSHA should consult the recommended policy for heat standard of the National Institute for Occupational Safety and Health. This is of concern to AGC. Cannon indicates there is not a “one size fits all standard” for an individual’s reaction to heat.

• Infectious Disease Standard. The COVID-19 temporary emergency standard will likely evolve into an infectious disease standard that will incorporate other conditions (e.g., measles, chicken pox, TB).

• Powered Industrial Trucks. In an effort to eliminate outdated references, this rulemaking states that the design and construction of powered industrial trucks by manufacturers must adhere to the latest ANSI standard. How this impacts contractors is the question Cannon and AGC will ask once the rule rolls out for public review and comment.

• Electronic Recordkeeping. The agency may look to reinstate Form 300 in its entirety. Currently, employers are required to file only Form 300A.

• Musculoskeletal Disorder (MSD) Column. It’s possible this column may get reinstated into the employer injury and illness logs in order to issue citations related to musculoskeletal disorder.

COVID-19’S IMPACT ON CONSTRUCTION

Is There a Remedy? Time Extension, Force Majeure or More?

By Bill Shaughnessy, Partner, William Underwood, Partner, and Chris Cazenave, Partner, Jones Walker LLP

As we turn the calendar into 2021, we expect to see an increase in disputes between owners, contractors, and suppliers about the time and cost impacts due to COVID-19. Now is the time to consider how your contract’s “delay,” “time extension,” or “force majeure ” clauses allocate risk between parties.

The term “force majeure” in U.S. common law means natural and unavoidable catastrophes that affect contract performance. Force majeure contract clauses allocate the risk of such events. Most U.S. standard construction contracts do not use the term “force majeure.” Instead, relief for force majeure events is addressed in delay and time extension remedial clauses.

What constitutes a force majeure event?

A force majeure event may exist if it is unforeseeable and outside the contractor’s control. Factors in determining whether a force majeure clause offers relief include: (1) whether the language in the force majeure clause specifically references the event as beyond the parties’ control; (2) whether the force majeure event was foreseeable; and (3) whether the force majeure event caused the party’s nonperformance.

COVID-19 might check these boxes. But it ultimately depends on the trier-of-fact’s evaluation of:

• The three (3) factors listed above;

• Your contract language;

• The facts!; and

• The relation between COVID-19 and the relief sought.

If your force majeure clause contains a specific list of events (e.g., “pandemic”), then COVID-19 would almost certainly fit. But some courts

construe the language of force majeure clauses to exclude events that are not specifically identified.

So what if your contract limits force majeure events specifically to events involving “acts of God” or nature?

The definition of “act of God” varies from state to state, and some states narrowly describe an “act of God” as something caused by nature. In which case, courts may be less likely to find the parties intended the clause to cover COVID-19.

Other force majeure clauses may include a “catch-all” provision. In these instances, some courts have held that common law notions such as unforeseeability should be considered when a party has not specifically listed an event.

Is COVID-19 an excusable event under form construction contracts?

Form construction contracts do not have “force majeure ” clauses but contain “excusable delay” clauses that could be applied to COVID-19 impacts and delays.

AIA – Excusable Delays

The AIA A201-2017 General Conditions Section 8.3.1 includes “catch-all” terminology that provides time extensions for events outside the contractor’s control:

If the contractor is delayed * * *

(3) by labor disputes, fire, unusual delay in deliveries, unavoidable casualties, * * * or other causes beyond the contractor’s control; * * * then the contract time shall be extended for such reasonable time as the architect may determine.

COVID-19 impacts could fall into several of these categories.

ConsensusDocs –Relief for “Epidemics”

The ConsensusDocs 200-2017 Standard Agreement specifically identifies “epidemics” as an excusable delay in Article 6.3 and almost certainly allows contractors relief from COVID-19 delays.

DBIA Expressly Provides Relief for Epidemics Under Definition of Force Majeure

If you are working on a design-build project using a standard DBIA form that incorporates the Standard Form of General Conditions (DBIA 535, 2010 version), a contractor will likely be entitled to a time extension for COVID-19 impacts, but not an adjustment to the contract price. The DBIA forms define force majeure events to include events beyond the contractor’s control, including “epidemics.” However, and unique from other standard contract forms, Section 8.2 of the DBIA form (Delays to the Work) expressly carves out force majeure events and prohibits a contractor from contract price adjustments for force majeure events, but allows such adjustments for other changes such as differing site conditions and hazardous conditions.

What do federal, state, and local contracts say?

Federal contracts rely on time extension clauses for delays outside the contractor’s control. FAR 52.249-14 lists examples of excusable events of delay, including “epidemics” and “quarantine restrictions,” which should provide a contractor a time extension for COVID-19 delays.

Similarly, most state/local contracts do not use the term force majeure. As a result, you should analyze COVID-19 impacts and review your excusable delay provisions.

What if your contract does not have a force majeure clause?

If a contract does not contain a force majeure clause, consider the common law doctrine of commercial impracticability. While not all states recognize impracticability as a defense, the Uniform Commercial Code §2-615(a) states that delays may be excusable if performance has been made “impracticable” for an event outside the seller’s control. The Restatement (Second) of Contracts Section 261

>> INDEX OF ADVERTISERS

recognizes the same defense. Both could be applied to COVID-19 delays.

Further, COVID-19 has resulted in governmental laws, orders, and regulations, which may make contract performance impracticable or impossible, and your contract may provide relief in such scenario.

Recommended COVID-19 Force Majeure Action Items

We recommend the following actions to plan and evaluate for a force majeure event:

Review your contract. Identify key clauses implicated by COVID-19. What relief are you entitled to under these clauses? Did you preserve your rights (e.g., required notice) to claim this relief in terms of notice and other documentation?

Identify impacts and how impacts were documented. What delays did your company face? How were your downstream vendors and suppliers affected? What notices were sent out, if any?

Communicate to inform, not to agitate. It may not be too late to provide notice under contract. Formal notices

The authors of this overview have written a comprehensive article by the same title. To read it, please visit https://bit.ly/3cbfLB4 or scan the QR code.

and other written and verbal communications among the parties should be precise, factual and without emotion or hyperbole. The point is to inform, while also satisfying technical notice requirements. ■

Bill Shaughnessy, William Underwood and Chris Cazenave are partners at Jones Walker LLP, specializing in construction law.

*Represents AGC Georgia member firms