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The Ohio Supreme Court’s October 9, 2018 decision in Ohio Northern University v. Charles Construction Services, Inc., 2018-Ohio-4057 issued a blow to general contractors attempting to obtain insurance coverage under their commercial general liability (CGL) policies for property damage caused by their subcontractor’s faulty work. The Ohio Supreme Court held that faulty work is not “accidental” or “fortuitous,” as contemplated within the policy’s definition of an “occurrence,” and found that the general contractor had no coverage under its CGL policy.

Ohio Northern University (University) sued the general contractor, Charles Construction Services, Inc. (CCS) arising out of a contract to build a luxury hotel and conference center (Project) on the University’s campus. After completion of the Project, the University discovered extensive water damage from hidden leaks and other serious structural defects that it believed were caused by the defective work of CCS and its subcontractors. In response to the University filing suit, CCS sought coverage under its CGL policy, relying on the products/completed operations (PCO) coverage available for claims involving property damage caused by the faulty work of a subcontractor.

Cincinnati Insurance Company (Cincinnati), CCS’s CGL carrier, intervened in the case and argued that it did not have to provide coverage to CCS. Cincinnati relied on the Ohio Supreme Court’s holding in Westfield Ins. Co. v. Custom Agri Sys. Inc., 2012-Ohio-4712, which ruled that there is no coverage under a CGL policy for a defective work claim because such faulty workmanship is not considered “accidental” or “fortuitous.” Therefore, the defective work is not an “occurrence” as defined under a CGL policy.

The University case made its way up to the Ohio Supreme Court, which ruled in Cincinnati’s favor, holding that it did not owe coverage to CCS. Notwithstanding the policy provisions that provide PCO coverage for property damages caused by the faulty work of a subcontractor, the Court applied Custom Agri. In doing so, it explained that there would be coverage for property damage claims caused by a subcontractor’s faulty workmanship if the faulty work was fortuitous. Ultimately, the Court ruled in Cincinnati’s favor because the subcontractors’ faulty work was not “accidental” or “fortuitous.” Therefore, there was no “occurrence” that triggered coverage under the policy.

In deciding this case, Ohio has unfortunately joined a small minority of states, including Ohio’s neighbor, Pennsylvania, in limiting coverage to general contractors for claims brought against them involving damage caused by the faulty workmanship of its subcontractors. The practical implications of this case are extremely significant for general contractors who have CGL policies issued in Ohio. In response to similar decisions in other states, the insurance industry has developed specific endorsements that effectively restore the coverage stripped away by cases like Ohio Northern University. The endorsement (often referred to as a “resultant property endorsement”) modifies the definition of “occurrence” to include property damage caused by the faulty workmanship of a subcontractor. Accordingly, it is important that you discuss this issue with your insurance agent/broker to confirm that this endorsement can be added to your CGL (and excess) policy.

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Construction Law Signal by Jason A. Copley, Lane F. Kelman And.. - 3M ago

On October 10, 2018, the amendments to the Contractor and Subcontractor Payment Act, 73 P.S. § 501, et seq. (CASPA) will take effect and significantly impact the rights and duties of owners, contractors, and subcontractors on all Pennsylvania commercial construction projects and some residential projects.

First passed in 1994, CASPA was enacted as a tool for contractors and subcontractors to receive timely payment. As most in the industry know, the statute sets forth payment procedures and timetables, and it defines what constitutes a wrongful withholding of payment. Violations may result in significant penalties, such as statutory interest, penalty interest, and assessment of attorneys’ fees and costs.

The amendments contain the following changes:

Suspension of Work

If payment is not provided by an owner or contractor, the unpaid contractor or subcontractor – after proper notice – may suspend performance of its work. Suspension of work without penalty until the overdue payment is received. In order to exercise its right to suspend work, the unpaid contractor or subcontractor must comply with two written notice provisions and waiting periods of 30 days followed by ten days. Compliance with these notice provisions is a pre-requisite to suspending work without default.

Retainage

Contractors and subcontractors may secure the release of retainage before final completion. Rather than waiting until final completion, contractors and subcontractors now have the right to post a maintenance bond with an approved surety for 120 percent of the withheld retainage amount. The posting of the bond obligates the owner or contractor to release the retainage where there is no notice of a deficiency item. Further, unless written notice of deficient work is properly and timely provided, retainage may not be withheld more than 30 days after final acceptance of the work.

Non-Waiver
The amendments include a non-waiver provision, which prohibits any part of the statute from being contracted out or set aside. In other words, the parties may not “contract around” the CASPA protections provided to contractors and subcontractors.

Written Notice of Deficient Work

The “stop work” provisions do not override the ability of an owner or contractor to withhold payment in good faith. But under the amendments, if an owner or contractor fails to provide timely written notice explaining why funds are withheld, the statute says an owner waives the ability to later dispute the invoice. An owner disputing work must provide written notice for withholding within 14 days of receipt of the invoice, or risk losing the right to dispute payment and the invoice must be paid in full. For a contractor or a subcontractor withholding payment from a downstream subcontractor, the written notice must be provided within the time period specified in the subcontract or, if none is specified, then the written notice is required within 14 days, or the basis to withhold payment is waived.

Looking Ahead

The CASPA amendments go into effect on October 10, 2018. It is vital that owners, contractors, and subcontractors involved in Pennsylvania construction projects become familiar with the new guidelines. As drafted, the amendments do contain ambiguities. Time – and litigation – may ultimately bring clarity to many of the open questions regarding the application of the amendments.

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I’m a management-side employment lawyer. It’s my job to go to court and defend employers and executives accused of all different types of misconduct, including sexual harassment. Over the last 20 years, I have seen it all. Some of my cases involve relatively tame allegations, like telling dirty jokes around the watercooler. And I have also been involved with cases involving extremely serious accusations, including indecent exposure, unwanted touching, and sexual assault. I spent a fair amount of time watching the Kavanaugh hearings. Like everyone else I know, I have a strong opinion on whether or not the nomination should be approved, but I did not write this article to share my personal opinions. There are enough political commentators on cable news shows doing that already. From an employment litigation and human resources perspective, there are several important lessons to be learned.

Lesson No. 1 – Who should conduct your workplace investigation?

The Senate Judiciary Committee spent a lot of time debating the issue of whether the FBI should have been called upon to conduct an investigation. After all, FBI agents are supposed to be experts when it comes to interviewing witnesses and gathering facts, and they are presumed to be truly independent and neutral. Maybe your company has a human resources department that is well equipped to investigate garden variety allegations of workplace misconduct. But are they professional investigators? When allegations are particularly severe or when they involve the highest levels of management in your company, regardless of the depth of your human resources department, you should consider engaging outside counsel or a consulting firm to take the lead on your internal investigation. Don’t be penny-wise and dollar-foolish. If you find yourself unlucky enough to be the defendant in a sexual harassment trial, even if the plaintiff is able to convince a jury that they were the victim of a hostile work environment, you may still be able to win your case if you can show that you took the complaint seriously and engaged a reputable investigator.

Lesson No. 2 – There is no such thing as a “confidential” complaint.

As you may remember from her testimony, Dr. Ford sent a confidential letter to Senator Feinstein describing her allegations against Judge Kavanaugh. Senator Feinstein said that she was respecting Dr. Ford’s wishes by keeping the letter secret. You should not repeat that mistake. Whenever an employee comes forward to you or a member of your management team with a complaint of workplace harassment, it is incumbent upon the company to immediately launch a thorough investigation and then to implement corrective action to put an end to any inappropriate conduct. There are no exceptions. The law does not allow you to sit on your hands and do nothing after receiving a complaint merely because the complaining employee requested confidentiality. Of course, it should go without saying that all harassment complaints and investigations should be handled with the utmost discretion and that information should be shared strictly on a need-to-know basis.

Lesson No. 3 – If you find yourself in the witness chair, remain level-headed and use plain English.

When asked how she was able to remember events which took place 36 years ago, Dr. Ford gave a scientific explanation about encoding within the human brain, repeatedly using technical terms like “hippocampus.” Would Dr. Ford have been a better witness had she simply said that there are some things in life that a person never forgets? Whether I am preparing a witness for deposition or a jury trial, I always insist on avoiding unnecessary jargon. Remember, in order for you to be believable, you first need to be understood. And what about Judge Kavanaugh? Some criticized him for appearing too angry. When a witness is accused of any type of workplace misconduct, I always want them to remain calm and professional on the witness stand. In harassment cases, conventional wisdom and experience teaches that an overly angry or emotional witness is an unconvincing witness. Thus, in many respects, both Dr. Ford and Judge Kavanaugh’s testimony provided examples of things to avoid on the witness stand.

Regardless of your opinions on Judge Kavanaugh and Dr. Ford and their testimonies, we can all agree that implementing appropriate workplace policies on harassment and providing training is only half the battle. What is often just as important when your case goes to court is how quickly and effectively you respond when receiving a complaint of harassment.

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Effective October 1, 2018, general contractors with projects in Maryland will have a new headache to deal with. That’s when Maryland’s new law, the General Contractor Liability for Unpaid Wages Act, will go into effect. Under the Act, GCs will be jointly and severally liable for the failure of any subcontractors on the GC’s project to comply with Maryland’s existing wage and hour law. GCs will have to ensure that all of their subcontractors (including any sub-subcontractors or other firms they hire) pay their employees in accordance with Maryland law.

Under the new Act, an employee can sue both its employer and the GC on the job for up to three times the wages owed to the employee, plus attorneys’ fees and costs. This applies to any job involving “construction services”, which is broadly defined to include any work involving “building, reconstructing, improving, enlarging, painting, altering, and repairing” of property.

Subcontractors will not be spared the effects of this new law. They are required to indemnify a GC for “any wages, damages, interest, penalties, or attorneys’ fees owed as a result of the subcontractor’s violation.” That means the failure to comply with Maryland’s wage and hour laws can expose a subcontractor to significantly greater liability than before.

GCs should prepare for the new reality by reviewing their subcontractor agreements to ensure they are protected. They also will want to implement protocols for reviewing the pay records of subcontractors and any sub-subcontractors or suppliers they hire.

In addition to the above compliance controls, subcontractors should be on the lookout for new indemnification language in subcontracts and the partial releases that most GCs require in exchange for periodic payment on construction projects.

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Join us for our 10th Annual Labor & Employment Law Seminar where our attorneys will lead interactive discussions on the latest issues impacting your business.

Event Details 8:00 AM-12:00 PM
Thursday, April 26, 2018
The Omni William Penn Hotel
530 William Penn Place
Pittsburgh, PA 15219
Thursday, May 3, 2018
Hershey Country Club
1000 East Derry Road
Hershey, PA 17033
Thursday, May 10, 2018
The Franklin Institute
222 North 20th Street
Philadelphia, PA 19103

Cost: No Charge

CLE & CPE credits available

Program Agenda

One Year In: Labor & Employment Law Under President Trump 
The Trump administration’s first year in office brought significant changes to labor and employment law. We will cover the latest developments including:

  • Important NLRB reversals on key Obama era rulings
  • Anticipated changes to the overtime rules and the future of the salary threshold
  • How legalized marijuana will impact your workplace and the safeguards you can use to protect your business
  • The EEOC’s newest initiatives and changes in discrimination and harassment law, including transgender accommodations
  • How to use the new federal law concerning confidential information and trade secrets to your advantage

Navigating the Workplace in the Age of #MeToo: A Panel Discussion
The rise of the #MeToo movement has created a ripple effect. All employers, large and small, must know how to respond to harassment allegations and ensure a safe and inclusive environment for employees. With extensive experience litigating these issues and counseling employers faced with these allegations, our panel will discuss best practices for:

  • Creating a safe work environment
  • Recognizing and understanding harassment in the workplace
  • Properly handling complaints and conducting investigations
  • Sexual harassment training and policies
  • Dealing with social media and inappropriate electronic communication

Is Big Brother Watching? Privacy in the Workplace
Electronic communications and new technologies are a part of the daily workday. How do you strike a balance between the employer’s right to monitor and an employee’s right to privacy? We will discuss privacy issues that frequently arise in the workplace and provide practical advice for employers to avoid common pitfalls relating to:

  • GPS Monitoring
  • Email, browser, and social media monitoring
  • Drug and alcohol testing
  • Criminal background checks
Speakers

Labor & Employment Group Chair Marc Furman and Co-Chair Jonathan Landesman with Christopher D. CarusoneChristopher M. GalushaLisa M. WamplerSteven M. Williams, and Joshua A. Brand.

Questions? Contact Olivia Paris-Kornilowicz at 215.564.1700 or okornilowicz@cohenseglias.com.

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Recent OSHA activity indicates possible changes in the scope and enforcement of the newly-created Improve Tracking of Workplace Injury and Illnesses Rule (Electronic Reporting Rule). OSHA intends to collect less data than the rule requires in order to address concerns about publicizing personally identifiable information (PII). This move suggests other changes to the rule may follow. 

As posted on this blog earlier, under current regulations, establishments with more than 250 employees must electronically report data contained in OSHA Forms 300A, 300, and 301, starting with information from 2017. Because Form 300A includes only aggregate yearly data on safety-related incidents, publicizing data from that form poses little to no risk of disclosing PII. Forms 300 and 301, however, record detailed information about specific safety-related incidents, including the affected worker’s name, address, job title, and date of birth. Although OSHA did not initially collect some PII from these forms and never intended to publish any PII it did collect, OSHA has now determined that it cannot guarantee such data will not be released.

Consequently, as explained in a recent OSHA agenda report, the agency has concluded that if privacy concerns prevent it from “publish[ing] collected worker injury and illness data because it cannot guarantee the non-release of [PII],” then it may, under the rule, discontinue collecting such data. Because of these concerns, OSHA proposes “to remove the requirement to electronically submit to OSHA information” from Forms 300 and 301. In fact, currently OSHA “is not accepting Form 300 and 301 information at this time,” despite what the Electronic Reporting Rule requires.

OSHA’s attention to PII may reflect that it recognizes other existing concerns about the Electronic Reporting Rule, some of which have arisen in litigation challenging the rule. In two separate but similar lawsuits, certain construction industry organizations claimed OSHA’s online posting of workplace injury and illness data discloses not only PII but also confidential business information that could harm competitive and reputational interests. In particular, disclosed information could give an adverse impression of a company’s safety program.

Those claims find support in OSHA’s commentary on the rule. In advancing the Electronic Reporting Rule, OSHA explained that collecting, disclosing, and providing public access to workplace injury and illness data “will . . . ‘nudge’ some employers to abate hazards” and would help “prevent workplace injuries and illnesses, without OSHA having to conduct on-site inspections.” By announcing such goals, OSHA implicitly acknowledges that publicizing this data could create negative impressions about certain companies’ safety record and OSHA compliance. Such impressions, however, may lack foundation, particularly when injuries and illnesses may not have resulted from any OSHA violation, but rather from unpreventable employee misconduct.

Although OSHA has not expressly stated that it will address such concerns, as it has for PII, it has said that its intention to revise the Electronic Reporting Rule moots the pending litigations regarding that rule. As a result, OSHA asked the Court to stay both matters, and construction industry groups have not objected.

Both OSHA’s shift in enforcing the Electronic Reporting Rule and its intent to make revisions may signal a possible change to OSHA’s priorities and approach to workplace safety. Given that the Electronic Reporting Rule was created under the Obama administration and modifications to its language and enforcement are occurring under the new executive leadership, the change may reflect a larger deregulatory inclination that the Trump administration promised. With the current climate, further changes in the Electronic Reporting Rule seem likely. These changes will require construction industry businesses to stay up to date with OSHA reporting requirements so they can determine the most cost-effective compliance strategies. Doing so in this evolving regulatory environment requires consultation with legal counsel and safety coordinators.

Michael Metz-Topodas is an Associate in the Construction Group and represents commercial and construction clients in all stages of litigation from assessing claims and developing case strategy to drafting pleadings, substantive and procedural motions, discovery responses, protective orders, and settlement agreements.

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A recent federal appeals court decision rejected a challenge to the Occupational Health and Safety Administration’s new rule for respirable crystalline silica (silica) exposure in the construction industry (the Silica Rule), keeping the rule largely intact. This new rule lowers the permissible exposure limit (PEL) for silica to fifty micrograms per cubic meter (50μ/m3) from the previous construction industry standard of 250 μ/m3. At the time OSHA began enforcing the Silica Rule on September 23, 2017, there still remained pending in federal court a challenge to the rule brought by multiple industry groups (Industry), mostly consisting of commercial construction trade associations representing general contractors, subcontractors, and suppliers. 

Facing significantly increased costs to implement the new Silica Rule, Industry principally argued that OSHA lacked substantial evidence that (1) the Silica Rule addresses a significant health and safety risk and (2) certain industries subject to the Rule had technically and economically feasible ways to comply. In challenging OSHA’s determination that lowering silica PEL would reduce health risks, Industry claimed OSHA relied on flawed methodology and inconclusive findings. The Court, however, found that OSHA accounted for such critiques and, thus, had a reasonable basis for reaching an opposite conclusion. In attacking feasibility, Industry pointed to similar research flaws, but the Court found Industry’s isolated examples did not undermine OSHA’s findings. Ultimately, none of Industry’s points challenged the Silica Rule, and its basis, sufficiently enough to overcome the deference courts must give to OSHA’s rules and decisions.

The Court also heard challenges from construction and general industry unions. The Court upheld OSHA’s decision to limit the Silica Rule’s trigger for employer-provided medical surveillance. The requirement is triggered when a worker is required to wear a respirator for thirty or more days per year (the unions argued for a shorter period). The Court, however, found the Silica Rule lacking in its failure to provide medical removal protection, which requires employers to remove an employee from silica exposure upon a physician’s written recommendation but continue the employee’s pay and benefits. The Court directed OSHA to reconsider this omission.

With the Court’s decision, the Silica Rule remains the governing standard. For the construction industry, the Rule provides two paths to comply with PEL. Employers can follow an OSHA-created table (called Table 1) listing the required engineering controls, work practices, and respiratory protection, including required respirator type and usage, to implement for discrete construction activities. In complying with Table 1, employers should ensure all employees associated with performing a listed task, including observers and assistants, abide by the listed controls and practices. Alternatively, employers can conduct their own air monitoring program to assess silica exposure, implement controls accordingly, and ensure such controls keep silica exposure below the PEL, as measured by objective data.

Although commentators on the Silica Rule have hinted that the Trump administration may push OSHA to delay or loosen the rule’s enforcement, such regulatory easing has not yet occurred. Regardless of how, complying with the rule requires construction industry businesses to employ greater safety measures and thus expend additional resources. Assuming the Silica Rule’s extension into construction operations remains unchecked, industry businesses need to determine how to comply with the rule in a cost-effective, but legally compliant, way. Doing so requires consulting with both their safety consultant and their counsel.

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Breastfeeding is now a protected act and category under New Jersey’s Law Against Discrimination (“NJLAD”). Employers are prohibited from discriminating against an employee in compensation, hiring, or firing because they breastfeed. This is a pivotal amendment to New Jersey’s civil rights law as it applies, unlike the similar federal law, to employers regardless of size (the federal counterpart is applicable only to employers with 50 or more employees). 

In addition, employers must provide a reasonable accommodation to the employee to express their milk unless the employer can demonstrate that providing the accommodation would be an undue hardship on its business operations. The accommodations must include reasonable break time and a suitable room with privacy (and not a toilet stall) that is in close proximity to the work area. Unlike the federal law, the reasonable accommodation is without any limitation on time. Although federal law requires breastfeeding accommodations for up to one year, there is no limitation for the accommodation under NJLAD.

Finally, the federal law directly states that employers are not required to provide compensation to employees during the requested break time. While the New Jersey law is silent on this issue, it states that the employer must not penalize the employee for requesting or using the accommodation. So, employers should proceed cautiously when  granting a breastfeeding employee break time.

If you have any questions or concerns regarding this amendment to the state’s civil rights law, please contact Christopher M. Galusha, a Labor & Employment partner in Cohen Seglias’ Newark, New Jersey office at cgalusha@cohenseglias.com or 973.474.5003.

Christopher M. Galusha is an experienced litigator with a diverse practice that includes employment law, commercial litigation, insurance matters, shareholder disputes, municipal law, and sports law. As a partner in the Firm’s Labor & Employment Group, Chris handles wrongful discharge, discrimination, sexual harassment, and hostile work environment claims.

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Traditionally, public agencies have awarded construction contracts via the “lowest responsible bidder” procurement method, where bidders submit sealed bids and contracts are awarded to the lowest responsible bidder. However, a number of governmental entities have started to award contracts through “best value” procurement, which looks at factors other than price. Quality, experience, and expertise of the bidders also are relevant considerations when selecting contractors or vendors under a “best value” procurement format.

Following the trend, on May 16, 2017, Philadelphians approved a ballot measure that amended the City’s Home Rule Charter to allow the City to award certain contracts based on the “best value” standard, in addition to the “lowest responsible bidder” approach. Shortly thereafter, on July 27, 2017, the City issued regulations governing the award of contracts based on the “best value” method.

Under the regulations, the City’s Procurement Commissioner can permit a City contract to be awarded pursuant to the “best value” standard only after the City Department has made a detailed recommendation to the Procurement Commissioner. This recommendation must include a relative weight for price scoring and for technical (non-price) scoring to be used in evaluating bids. The minimum price scoring must be at least 30% of the total evaluation. The minimum technical scoring must be at least 50% of the total evaluation.

Technical scoring will be based on some or all of the following criteria:

  • Qualities of the goods or services proposed by the bidder;
  • The bidder’s technical, administrative, and financial experience and capacity;
  • The bidder’s management plan and proposed scheduled;
  • The bidder’s experience in providing similar products and/or services;
  • The experience and capacity of bidder’s staff and/or subcontractors;
  • The bidder’s diversity and inclusion plan;
  • The bidder’s past performance on other contracts, including other City contracts;
  • The bidder’s safety history and plan;
  • Benefits to the City of supporting growth of new or small businesses, including those owned by minority or disabled persons or women;
  • Anticipated job creation, particularly in low and moderate income City neighborhoods;
  • The bidder’s certification as a Local Business Enterprise (LBE); and
  • Additional economic, environmental, and social benefits of the proposed goods or services that support the City Department’s objections.

If the Procurement Commissioner approves the “best value” standard, a selection committee must be formed. The selection committee shall be comprised of diverse individuals having familiarity of the goods and services proposed and appropriate technical, financial, or other experience for evaluating the cost and qualitative factors. The selection committee must evaluate each proposal based on the price and technical scoring criteria. Then, a representative from the Procurement Department will tally the scores, and the selection committee will generally recommend the bidder receiving the highest overall score to the Procurement Commissioner for either an award of a contract or for additional negotiations of price and other terms.

The City’s Procurement Department has indicated that, while the normal course of business will continue to be the “lowest responsible bidder” method, it will begin to roll out the City’s most complicated bids under the “best value” standard between December 2017 and March 2018.

So what should contractors do to increase their chances of being awarded a “best value” opportunity?

First, contractors should ensure that they are compliant with all disclosure requirements as set forth in Chapter 17-1400 of the Philadelphia Code. For example, when submitting a proposal for a “best value” opportunity, contractors must disclose any campaign contributions that they (or any consultant they hire to assist in obtaining the potential contract) made in the preceding two years to any political candidates or incumbents running for any local Philadelphia or Pennsylvania state office. As a result, contractors should begin to keep track of any disclosable campaign contributions and any other required disclosures to ensure that they are prepared to fulfill the disclosure requirements at the time of application for a “best value” opportunity.

Second, when bidding on “best value” procurements, contractors need to think strategically and be mindful of both the price and technical scoring parameters. Having the lowest price or exceeding the request for proposal (RFP) requirements may not be enough. Often times, the government will award a “best value” contract to a higher priced bidder because the government believes that the higher priced bidder offers a better value to the government based on its technical scoring. As such, it is important to remember not to become complacent when bidding on “best value” opportunities. Before finalizing their bids, contractors must review each RFP’s baseline requirements for categories where they can add value and then highlight those benefits in their proposals.

Whether bidding on local opportunities in Philadelphia or large-scale federal construction projects, the procurement process and its requirements vary with each jurisdiction. It is important that contractors familiarize themselves with the bidding requirements of each jurisdiction and each RFP. As always, contractors who are unsure of their obligations or remedies when bidding on a public contract should consult legal counsel.

Ed Seglias is the Vice President of Cohen Seglias as well as a shareholder and a member of the Board of Directors. Ed is a partner in the Firm’s Construction Group, and concentrates his practice in construction law and commercial litigation.

Zachary D. Sanders is an associate in the Firm’s Construction Group and concentrates his practice on construction litigation in both state and federal courts and alternative dispute resolution proceedings. 

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Last month a bill was introduced to the New Jersey State Assembly (A-5287) by Assemblymen John McKeon (Essex and Morris) and Jon Bramnick (Morris, Somerset, and Union) that would bar provisions in employment contracts that waive any substantive or procedural rights or remedies. The bill also seeks to prohibit agreements that conceal any details relating to discrimination claims. 

The impact of this bill, if enacted as drafted, would seemingly preclude arbitration of employment-related claims of discrimination, retaliation, or harassment across all statutory frameworks including the New Jersey Law Against Discrimination (“NJLAD”), N.J.S.A. 10:5-1 et seq., and the Conscientious Employee Protection Act (“CEPA”), N.J.S.A. 34:19-1 et seq. The bill not only eliminates arbitration of employment disputes, but would also facilitate a public record for claims of discrimination, retaliation, or harassment.

In addition to the procedural limitations, the bill also impacts the ability of employers to negotiate and include, as part of a settlement agreement, confidentiality provisions that prohibit the disclosure of the settlement terms reached between the parties. This bill appears to be a response to the #MeToo Movement that has swept the country, and although change is necessary, the bill could have a considerable effect on an employer’s ability to limit the disclosure of the details relating to a claim of discrimination, retaliation, or harassment pursuant to the NJLAD or CEPA. Thus, details relating to such claims could become public record.

We will continue to follow this bill as it moves through the New Jersey Legislature. For more information, please contact Christopher M. Galusha or the Cohen Seglias attorney with whom you work.

Christopher M. Galusha is an experienced litigator with a diverse practice that includes employment law, commercial litigation, insurance matters, shareholder disputes, municipal law, and sports law. In his employment practice, Chris handles wrongful discharge, discrimination, sexual harassment, and hostile work environment claims.

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