As many of you know, last April the EEOC updated its recommendations on employers’ use of applicants’ arrest and conviction records. At its core, the updated enforcement guidance makes illegal policies that automatically reject job candidates simply because they have a criminal record.
The enforcement guidance sets forth criteria employers should consider when making hiring decisions on applicants with criminal histories. They are:
- The nature and gravity of the offense or conduct;
- The time that has passed since the offense or conduct and/or completion of the sentence; and
- The nature of the specific position.
The guidance also encourages employers to provide opportunities for individualized assessment for those individuals who are screened out. The EEOC suggests that employers should assess each individual in a manner that provides a way for employers to ensure that they are not mistakenly screening out qualified applicants or employees based on incorrect, incomplete, or irrelevant information, and for individuals to correct errors in their records.
Ultimately, employers are well served to consider the nature of the position to be filled and whether the findings from a background check should exclude the employee from the position.
Sometimes a subcontractor is just too far down the chain to make a claim on a bond. A recent Kansas cases illustrated that a sub-sub-subcontractor was not a claimant under a subcontractor’s bond and its claim was denied. I wonder if anyone looked at the bond to see which entities it would actually cover before the problem arose.
In Dun-Par Engineered Form Company v. Vanum Construction Company, the job involved work at Fort Riley Army base. Because it was a federal job, the general contractor was required to provide a bond, and under the Miller Act, the bond only provided protection down to the sub-subcontractor. The general contractor then required its subcontractors to obtain a bond, but Vanum, a subcontractor, did not obtain a Miller Act form bond. Instead, Vanum’s bond only provided bond coverage to those entities that contracted with Vanum. Dun-Par was hired by one of Vanum’s subcontractors, making Dun-Par a sub-subcontractor to Vanum.
The dispute in this case came down to whether Dun-Par was a claimant under the bond. The bond defined claimant as an entity having a direct contract with the principal or having valid lien rights which could be asserted in the jurisdiction where the project was located. There was no question that Dun-Par did not contract with Vanum, making the only question whether Dun-Par had lien rights.
The trial court found that Dun-Par did have lien rights under state law, even if a lien could not be filed on the federal project. The appellate court disagreed, finding that the jurisdiction of the project referred to the character of the project, here a federal project. Because liens could not be filed on the project, Dun-Par did not have valid lien rights.
This certainly seems to be an odd result. Vanum was required to get a bond and it did so. But, the bond was limited to those entities with whom it had entered into a contract. Do you closely review the bonds involved on your project before you sign on? Perhaps you should.
I hope you and your family are enjoying some well earned time off this Thanksgiving.
Today’s post provides me an opportunity to thank everyone who gave me ideas for the blog and I thank you for reading it.
I’d also like to thank all of my construction clients from whom this blog is written. I appreciate the opportunity to assist you in your construction projects.
Finally, I regret to inform you that we will not be deep frying our turkey this year. So, there is very little chance that we will burn the house down.
In a recent post we noted that the OFCCP issued new regulations that will require contractors to collect data and track hiring efforts related to their hiring of disabled employees. Associated Builders and Contractors (ABC) filed suit last week seeking to stop the implementation of these regulations, not because ABC members disagree with the legitimate affirmative action and nondiscrimination objectives of the Rehabilitation Act, but because the new rules impose unprecedented, wasteful and burdensome data collection and utilization analysis requirements on government construction contractors.
In its recent press release, ABC Vice President of Federal Affairs Geoff Burr noted that the rule will do nothing to increase employment opportunities for individuals with disabilities. Instead, the new burdens it imposes mean many construction contractors are likely to stop pursuing government construction projects—particularly small businesses that currently provide services but lack the resources to meet the rule’s new burdensome requirements.
The ABC lawsuit points out that the new required data collection and analysis is an effort by the OFCCP to force construction contractors to meet a new established 7% workforce utilization goal for individuals with disabilities. But, that goal is not authorized by the Rehabilitation Act, section 503. The lawsuit also points out that the OFFCP is ignoring the very unique aspects of the construction industry in that the work force, as recognized by the OFCCP, is fluid and temporary. Because of these unique characteristics, the OFCCP has previously exempted the construction industry from certain types of utilization analysis and statistical data collection that the new rules are seeking to impose.
ABC will ask the court for a hearing on its injunction and the parties will then have an opportunity to argue their points and submit briefs to the court. The rule is not scheduled to go into effect until March 24, 2014, so the court should have an opportunity to rule before then.
The Lien & Credit Journal had an interesting article the other day discussing which states’ laws allow you to waive lien rights. The blog, entitled Who Lets You Waive Your Lien Rights Before Payment? identified four types of state laws. Those states that prohibit waiver, those that allow waiver, those that appear to have conflicting laws, and those that have no law.
It was interesting to see that Nebraska is one of only three states that allows a contractor to waive lien rights before being paid. This certainly appears contrary to the majority of other states that are silent on the issue or prohibit upstream contractors from forcing contractors to waive lien rights before being paid. Nebraska statutes specifically allow contractors to waive their lien rights. Nebraska statute section 52-144 provides that a contractor may waive its construction lien rights both before and after materials or services are furnished. And, no consideration is required in order for the waiver to be valid. This means that a contractor may waive its lien rights without being paid.
Of course, simply because a contractor may waive its lien rights before being paid is allowed, it’s not always a good idea. While there may be some business reasons to waive your lien rights before you are paid, the lien provides you with one of your best opportunities to be paid.
Before you waive your lien rights on a project, make sure you know how and when you will be paid. Otherwise, you might be waiving your best opportunity to get paid good bye.
Today’s post is by Douglas Amen, an associate at Lamson Dugan and Murray, LLP.
As discussed earlier, the Office of Federal Contract Compliance Programs (“OFCCP”) issued the Final Rules for the Vietnam Era Veteran’s Readjustment Assistance Act (“VEVRAA”) and Section 503 of the Rehabilitation Act. These new rules will require employers to take affirmative action to recruit, hire, promote, and retain veterans and individuals with disabilities (“IWDs”). In order to track contractors’ progress, VEVRAA will include “benchmarks” while Section 503 will include “utilization goals” for employers to follow.
Section 503 of the Rehabilitation Act prohibits federal contractors and subcontractors from discriminating against individuals with disabilities. The final rules establish a nationwide 7% utilization goal for qualified IWDs. If a contractor has 100 employees or less, this 7% goal will apply to the entire workforce. Any employer with more than 100 employees will have to apply this utilization goal to each of their job groups. In order to monitor their progress, contractors must conduct an annual analysis of their utilization goal and assess their problem areas. If contractors identify any problem areas, they will be required to establish “action-oriented” programs that address these problem areas.
Under VEVRAA, federal contractors must establish annual hiring benchmarks for the hiring of “protected veterans”. Federal contractors will have two options to implement these benchmarks. The first is to peg their benchmark to the national percentage of veterans in the civilian workforce, which is currently at 8 percent. This data will be supplied annually by the OFCCP. The second option is to establish their own benchmarks based on data from the Bureau of Labor Statistics (BLS) and Veteran’s Employment and Training Service/Employment and Training Administration, which will also be available from the OFCCP. Unlike Section 503, either benchmarks will apply to a contractor’s entire workforce, regardless of size.
These rules will become effective March 24, 2014, so contractors should start the process now to become compliance ready. After that, if a contractor fails to establish a benchmark/utilization goal or engage in significant efforts toward these goals, they may be found in violation of these rules.
The Office of Federal Contract Compliance Programs (OFCCP) has issued the Final Rules for the Vietnam Era Veterans’ Readjustment Assistance Act and the Rehabilitation Act. The Final Rules will require a change in how federal contractors hire, report and record their efforts to veterans and individuals with disabilities under these rules.
Veterans’ Regulations Changes
- Contractors must establish annual hiring benchmarks for protected veterans.
- Contractors must document and annually record the number of veterans who apply for jobs and the number of veterans they hire.
- Contractors must invite applicants to self-identify, at pre-offer, post-offer, and every 5 years.
Section 503 Disability Regulations Changes
- Establishes an “aspirational” 7% utilization goal of hiring individuals with disabilities;
- Contractors must invite applicants to self-identify at pre-offer and post-offer.
- Contractors must permit OFCCP on-site or off-site access to documents for compliance and focused reviews.
The most immediate change required by these rules will be to update subcontracts. All subcontracts must now contain the following language:
This contractor and subcontractor shall abide by the requirements of 41 CFR 60-300.5(a). This regulation prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans.”
And, yes, this provision must be in bold print.
These new regulations will require federal contractors to review their obligations under both the VERAA and section 503 regulations. Over the next few weeks, we’ll detail contractors’ obligations under the new regulations.
You know the situation – your subcontractor is doing a horrible job and you want them off the job. If you terminate the contract and bar them from jobsite, do you have to provide an opportunity them an opportunity to cure? You may if you are thinking about back charging the subcontractor for repairs.
A recent case out of Oregon discussed this very situation. There, the general contractor terminated the subcontractor’s contract for convenience, removed it from the jobsite, and refused to pay the subcontractor for materials delivered to the jobsite. The subcontractor filed a construction lien to recover the costs of the materials. The general contractor countered that it did not have to pay the subcontractor because the cost to repair the subcontractor’s work exceed any amount the subcontractor alleged was owed.
The court ruled in favor of the subcontractor and held that when a contract is terminated for convenience, the cost of curing the defect may only be recovered after providing the subcontractor with an opportunity to cure. Here, the general contractor did not give the subcontractor the opportunity cure, so it could not recover the cost of curing the subcontractor’s defective work.
This case reminds us of two important considerations. First, read your contract and understand the termination provisions. Second, be wary of terminating a subcontractor without providing the subcontractor the opportunity to cure its mistakes.
I am blessed to work with great people. Last week we volunteered with the United Way of the Midland’s Day of Caring. We cleared a park of overgrowth and planted trees. It was a great chance to get out of the office with co-workers and an opportunity to give back to the community.
Thank you to the United Way of the Midlands for organizing this event, and thanks to the team at Lamson Dugan and Murray for digging in the dirt to better our community.
Today’s post is by Doug Amen, one of our new associates at Lamson, Dugan and Murray LLP.
With the competition for jobs today, the fight for lucrative government construction contracts is tougher than ever. Often contractors find themselves on the outside looking in and want to do something about it. Unfortunately, for anyone attempting to challenge a construction contract bid the cards are stacked against them.
That’s because in order to challenge an agency’s award of a project, a challenger must show that the agency’s decision was “arbitrary and capricious.” In Nebraska this has been defined as: “…action taken, in disregard of the facts or circumstances of the case, without some basis which would lead a reasonable and honest person to the same conclusion.” Wagner v. City of Omaha, 236 Neb. 843 (1991). In other words a court will not substitute its judgment for that of an administrative agency. As long as a government agency follows their own rules, their decision will not be disturbed by a court; even if the court disagrees with the decision.
This also means that a court will give administrative agencies wide latitude in interpreting their own rules. In a recent Florida decision, a second-place finisher in a bid contest, challenged an agency’s decision. The issue was whether the Florida agency followed its own statutory requirements for awarding the bid. The challenger presented a “hyper-technical argument”, arguing for a very literal reading of the agency’s rules. The court rejected this approach and reasoned that courts should not construe an agency’s rules too narrowly. But perhaps more importantly the court noted “courts [are encouraged] to overlook noncompliance with technical bidding requirements where there is otherwise substantial statutory compliance.” Here is a copy of the Florida case.
What does this mean for someone challenging a construction bid? As long as an administrative agency follows their own rules, a court will not second guess them and the challenger is out of luck.