Stephanie U. Eaton - Co-Chair, Construction Group; Vice Chair of Southern Offices, Litigation Department; Editor, The Site Report
and
Julian E. Neiser - Co-Chair, Construction Group; Vice Chair of Northern Offices, Litigation Department
What Employers Can Do When a Union Knocks on Their Door
By Kevin L. Carr
When a union knocks on an employer's door, it can be a shock and awe experience for the unprepared employer. It is important for employers to understand their rights and obligations when dealing with unions to ensure that they make the right decisions for their business. And, like most things, an ounce of prevention is worth a pound or more of cure.
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4 Commercial Development Trends for 2023
“Hybrid structures also lead to a contraction in office space demand, which gives developers the opportunity to reimagine their office product.”
Why this is important: As businesses reimagine their workspaces and employees increasingly have flexibility to work from home either full time or as part of hybrid roles, the resultant changes in their interactions with the built environment create new opportunities for development, design, and construction creativity. These new projects provide excellent opportunities for construction businesses to set themselves apart, but changes can also create new challenges and potential liabilities. Developers, design professionals, and contractors alike should carefully consider their contracts, bond terms, and insurance coverages when taking on a unique project to ensure they have adequate protections in the event of project delays or other challenges created by the unique attributes of the project. --- Steven C. Hemric
Cyber Security: No Industry Immune from Risk of Cyberattacks
“In fact, Brad Spiess, vice president of Union Insurance Group, says the construction industry is the third most common industry targeted by hackers.”
Why this is important: When you hear the word cyberattack you think of attacks on banks, large box stores, or medical facilities. You should add the construction industry to that list because it is the third most common target for cyberattacks. These types of attacks are only increasing because bad actors have created processes that have streamlined how they attack businesses. They like to attack the construction industry because large sums of money are being transferred in and out of bank accounts via wire transfers. Recently, we have seen companies experience bad actors squatting on business email accounts waiting to redirect wire transfers or direct deposits. The bad actors will use a phishing attack or spoofing attack to trick an employee to provide them with information that allows the bad actors to have administrative access to the company’s email system. With this administrative access, the bad actors will have emails redirected to them and they will wait for information related to a wire transfer or direct deposit to be emailed. The bad actor will then hijack that payment by emailing the sender with new wiring information from a legitimate account at the company, erase the email from the legitimate account holder’s outbox, and have the payment directed to a different account. Only later, when the business sees that payment for services have not been received, or an employee sees that a paycheck has not been deposited is the breach discovered. However, by that time, it is too late, and the bad actors are already gone with the funds.
To prevent being a victim of a cyberattack, cybersecurity has to be made part of a company’s culture. A robust training and updating of policies and procedures is needed to combat this type of attack. Employees need improved training on the importance of cybersecurity, how to protect the company’s system from attack, and how to recognize an attack and report it. The company needs to invest in updating software and training, and be aware of the latest methods bad actors are using to infiltrate computer systems and how to prevent an attack. Finally, a company needs to do an audit of all of the data it is holding. The company needs to know what data it has, what data it needs to retain, what data it can get rid of, and who has access to all of that data. Holding a lot of data, especially data you no longer need, only increases the risk and liability to the company in the event of a data breach, so a business should establish a policy to periodically delete data the company no longer needs to hold. Additionally, not every employee needs access to all the data your company holds, so a company should limit employee access to only the data the employee needs to access in order to accomplish his or her job. If you would like a review of your policies and procedures, or if you need training for your workforce in cybersecurity, please contact a member of Spilman’s Cybersecurity Practice Group. --- Alexander L. Turner
Local Senator’s Bill Tightens Home Defect Lawsuits
“A bill sponsored by a St. Augustine lawmaker would shorten the time for residents to file lawsuits about construction defects in their homes.”
Why this is important: Legislation in Florida may soon change the time property owners have to file construction-related lawsuits. Both the Florida Senate and House of Representatives passed identical bills and recently converted them into an Act to be presented to the Governor. The Act would revise the “triggering actions” in section 95.11 of the Florida Statutes to provide that actions related to the design, planning, or construction of an improvement to real property must be filed within four years from the date of the issuance of a temporary certificate of occupancy, certificate of completion, or date of abandonment of incomplete construction, whichever is latest, instead of from the date of actual possession by the owner or the issuance of the certificate of occupancy. The Act would also shorten the time limit to seven years, instead of 10 years, from the new “triggering actions,” to file lawsuits based on “latent defects” – which are defects in the construction of a building that could not have been discovered by reasonable and customary observation or inspection at the time of the sale of the property. These are important dates for contractors and owners to track as a construction project nears completion so that legal rights to file suit and/or defend a suit are exercised if construction defects arise. This legislation should also serve as a reminder for contracting parties to collaborate to the extent possible to facilitate inspections as soon as defects arise so that the original contracting parties have an opportunity to remedy problems that even they did not anticipate or observe at the time of construction. If you have questions about potential construction defects on your construction project, do not hesitate to call upon our Construction Practice Group for assistance. --- Stephanie U. Eaton
Pa. Supreme Court: Groups that Appeal Environmental Permits can Recoup Legal Fees from Companies
“The decision resulted from two cases: Clean Air Council, the Delaware Riverkeeper Network, and Mountain Watershed Association v. DEP and Sunoco Pipeline and Gerhart v. DEP and Sunoco Pipeline.”
Why this is important: Project owners whose activities are subject to environmental permitting requirements often carry a heavy financial burden in securing and maintaining these permits. In Pennsylvania, this burden may become a little heavier for those who also find themselves having to defend a permit appeal as a recent Pennsylvania Supreme Court decision has made it easier for successful environmental groups and other challengers to recover attorneys’ fees and costs from permit applicants. While permit applicants must not only bear their own legal costs in defending a permit appeal, the Court’s ruling increases the possibility that they also be required to reimburse parties that challenge permits issued under the Clean Streams Law (“CSL”) for their attorneys’ fees and costs.
Prior to this decision, an Environmental Hearing Board (“the Board”) rule provided that a challenger could not recover attorney fees and costs from a private party absent a showing that it pursued or defended the appeal in bad faith or for an improper purpose — a rather difficult standard to meet. According to the Court however, this “per se bad-faith standard” was incompatible with the intent embodied in the CSL which plainly provides that the Board, “upon the request of any party, may in its discretion order the payment of costs and attorney’s fees it determines to have been reasonably incurred by such party in proceedings pursuant to this act.”
The reversal of this standard is likely to incentivize environmental groups and others to file permit appeals under the CSL. As suggested by the Court, “a citizen who is skeptical that he or she will be able to recover the considerable expenses incurred in taking on a corporate applicant…is a citizen far less likely to step up in service of protecting Pennsylvania’s environmental resources.” Project owners and developers therefore must minimize this risk by ensuring its permit applications are capable of surviving the highest level of scrutiny. Failure to do so could not only lead to a denial of a permit application, but payment of an opposing parties’ legal expenses. --- Jonathan A. Deasy
After Republican Complaints, DOT Abandons Attempt to Discourage Highway Construction
“The action makes it explicit that states can spend $466 billion from the infrastructure law in ways that activists warn will worsen climate change.”
Why this is important: The Federal Highway Administration’s revised guidance on state use of funds provided by the new infrastructure law makes it clear that the states will have broad flexibility to use the funds as they see fit. This flexibility means that states may undertake a large variety of projects using the newly available funding. Contractors working in the transportation and infrastructure space should be prepared to see a plethora of new projects of varying magnitudes become available for bid. Contractors new to the Department of Transportation contracting space and wishing to take advantage of these projects should take steps now to familiarize themselves with the unique requirements and processes in place on DOT projects, including engagement of legal counsel experienced navigating the unique contracting and dispute resolution processes on these types of projects. --- Steven C. Hemric
Drywall Finishing Robot That Perfectly Imitates Humans
"Canvas robot can semi-autonomously finish large sections of drywall."
Why this is important: A good drywall installer is invaluable. It was once believed that skilled labor like drywall installer was safe from automation. That may no longer be the case. Robotics company Canvas now has a robotic solution for installing drywall. Currently, the robot is only able to semi-autonomously finish large sections of drywall by applying finishing compound and smoothing out drywall. Workers are still needed to do the taping and to finish more complex geometries. The robot is able to perform this skilled work by imitating human expertise. The robot does require a human operator to assign it tasks. And, the robot has become so user friendly that Canvas employees no longer need to be onsite to operate it. After five days of training, a drywall subcontractor can now operate the robot itself to supplement its workforce. As this technology progresses, the cost of installing drywall is likely to drop while the quality remains the same or better. --- Alexander L. Turner
In Fight Against Climate Change, NC Board Seeks to Change Building Construction Code
“The N.C. Building Code Council reviews the codes every six years, per North Carolina law.”
Why this is important: The N.C. Building Code Council is required by North Carolina law to reevaluate the building code every six years. In light of climate change legislation enacted in North Carolina on the heels of Governor Cooper’s 2019 Clean Energy Plan, changes to the energy code are being considered that would result in an 18 percent increase in energy efficiency for new homes. These code changes are in line with the 2021 International Energy Conservation Code. Representatives of various home builders criticized energy code changes, which would make homes more expensive at a time when there is an affordability crisis, with changes in framing and insulation requirements. The Chair of the Building Code Council’s energy ad hoc committee, however, emphasized and stressed that according to an analysis conducted for the Council, the increased energy efficiency of the new homes would be paid off within four years, and the energy efficiency improvements will create about 60,000 jobs in the state over 30 years and save consumers about $5 billion in energy costs.
The Council is accepting comments on the proposed changes until April 17, 2023 by email to Carl Martin at carl.martin@ncjoi.gov or by letter to Carl Martin, Secretary, NC Building Code Council, NC Dept. of Insurance, 1202 Mail Service Center, Raleigh NC 27699-1202. The Council will vote on the code changes at its June 2023 meeting, and if the Council approves the changes, then opponents of the code changes can write to the N.C. Rules Review Commission to explain why they oppose the change. Thereafter, any member of the North Carolina House or Senate could introduce a bill to strike the Council’s rule down.
If the Energy Code is not changed by July 1, 2024, the current code will remain in effect until 2031. Thus, the outcome of the potential energy code changes is very important, as it will impact the course of construction, the potential energy efficiency job market and the state’s ability to meet its climate change goals. --- Stephanie U. Eaton
A New 3D Printing Material for Construction could be Capable of Capturing CO₂
"The issue is particularly important as the demand for concrete is expected to continue to grow, as is the trend toward urbanization globally."
Why this is important: Last year, The Site Report brought you an article by tephanie Eaton and Alex Turner regarding the history and advances of 3D construction, both terrestrial and extraterrestrial. 3D construction is now being tested to see if it can be a more sustainable construction method. Oregon State University and Sandia National Laboratory have been awarded a three-year, $540,000 grant from the U.S. Department of Energy to investigate whether it is possible to trap industrial carbon emissions in 3D printed construction materials. This process, if successful, would lower the construction industry’s effect on the environment. The construction industry is one of the leading producers of CO₂ with the generation of 13 percent of global CO₂ emissions. The concrete used in 3D printing construction material is no different that concrete used in other construction applications, and is one of the greatest contributors to the construction industry’s CO₂ emissions. To combat these emissions, the researchers aim to “develop sustainable binders that can store and mineralize the carbon dioxide captured in printed building components such as walls.” This is an exciting new development in sustainable construction that hopefully will result in more economical and environmentally friendly construction in the future. --- Alexander L. Turner
OSHA Rule Change Expands Use of Instance-by-Instance Citations
“OSHA regional administrators and area office directors will have the authority to cite certain types of violations as instance-by-instance citations for cases where the agency identifies ‘high-gravity’ serious violations of standards specific to certain conditions where the language of the rule supports a citation for each instance of non-compliance.”
Why this is important: This newly effective rule from OSHA is discretionary and is not expected to change the way OSHA handles most enforcement, but it provides OSHA an additional tool to bring heavy consequences on contractors in serious situations. The new rule highlights the importance for contractors of both maintaining safe on-site conditions and maintaining thorough documentation of all required conditions, illnesses, and injuries, as it could significantly increase the magnitude of initial citations on construction projects for conditions that previously may have caused in a single citation, but could now result in multiple citations. Contractors should review their policies and procedures to ensure thorough compliance now that the new rule is in effect. --- Steven C. Hemric
