A new California law effective July 1, 2015 requires employers to provide at least 3 paid sick days per year. Workers covered by valid collective bargaining agreements meeting certain requirements are exempt, but contractors should review their sick leave policies for all employees to ensure they are in compliance. Please click here for a helpful guide to the new law prepared by Pillsbury's employment law group.
On September 4, 2014, the U.S. Court of Appeals for the Ninth Circuit issued a decision rejecting the argument that a Clean Water Act (CWA) "permit shield" required the dismissal of a CWA citizen suit. The case is Alaska Community Action on Toxics, et al. v. Aurora Energy Services, LLC; Alaska Railroad Corporation, which had been argued less than a month before the ruling was made. The defendants own and operate a coal loading facility located on the northwest shore of Resurrection Bay in Seward, Alaska. Since 2001, the facility has been covered by an EPA "multi-sector" General Permit for Stormwater Discharges, and the defendants argued that any spills of coal from the facility into Resurrection Bat was covered by this permit and the "permit shield" provisions of Subdivision (k) of Section 1342 of the CWA (33 U.S.C. § 1342(k)). The lower court agreed with the defendants and granted summary judgment.
Rule of Thumb: If the business entity's name change results in the California Secretary of State issuing a new registration number, a new California contractor's license will be required ~ a contractor's license is not transferrable. If a new license is required, you must file an application for original contractor's license and fulfill any other requirements, including bonding and insurance requirements. The license application approval process can take time, plan ahead and, if prudent, request that the license application approval process be expedited. (It is a misdemeanor for a person to engage in the business or act in the capacity of a contractor in California without having the requisite contractor's license.)
On September 4, 2014, U.S. District Court Judge Carl Barbier issued a ruling holding that BP Exploration & Production Inc. is subject to enhanced civil penalties under the Clean Water Act (CWA) because the deadly April 20, 2010 blowout, explosion, fire and massive oil spill at the Macondo well in the Gulf of Mexico was due to BP's gross negligence and willful misconduct. Thousands of cases involving over a hundred thousand claimants have been filed in federal and state courts. The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010. The Court's ruling is very long (over 150 pages), and consists of an exhaustive account of the accident, and well as Findings of Fact and Conclusions of Law.
New Jersey's Appellate Division recently reversed a trial court's dismissal of a general contractor's claim against a performance bond, holding that the bond must cover the general contractor as the intended obligee, even though the general contractor was not expressly named in the bond.
In Allied Building Products Corp. v. J. Strober & Sons, LLC, et al., A-1113-12T4 (NJ App. Div., September 5, 2014), Dobco, Inc. ("Dobco") was the general contractor for a science hall renovation project at William Paterson University. J. Strober & Sons, LLC ("Strober") bid for and was awarded a roofing subcontract on the project. The subcontract between Dobco and Strober required Strober to obtain payment and performance bonds, in the form annexed to the Dobco-Strober subcontract (which required that Strober be named obligee on the bonds).
New Jersey Appellate Division Orders Reformation of Surety Bond Consistent With Terms of its Principal's Contract
New Jersey's Appellate Division recently reversed a trial court's dismissal of a general contractor's claim against a performance bond, holding that the bond must cover the general contractor as the intended obligee, even though the general contractor was not expressly named in the bond.\n\nIn Allied Building Products Corp. v. J. Strober & Sons, LLC, et al., A-1113-12T4 (NJ App. Div., September 5, 2014), Dobco, Inc. (\"Dobco\") was the general contractor for a science hall renovation project at William Paterson University. J. Strober & Sons, LLC (\"Strober\") bid for and was awarded a roofing subcontract on the project. The subcontract between Dobco and Strober required Strober to obtain payment and performance bonds, in the form annexed to the Dobco-Strober subcontract (which required that Strober be named obligee on the bonds).
To bid for, contract for and perform work on most construction projects in California, a contractor must obtain a contractor's license, and construction contracts and subcontracts entered into must be in the licensee's name. When two licensees endeavor to undertake a project jointly, often they do so as what is commonly referred to as a joint venture or JV. (Such a venture may be established under a detailed written JV, bidding, teaming, partnership or LLC agreement, or may simply be a general partnership that results from the joint submission of a bid or performance of work.) What licensees may not realize is that to contract for work in the name of the joint venture, the licensees must first obtain a joint venture license from the Contractors' State License Board (CSLB). Contractors that JV should carefully review the rules governing when a joint venture license is required.
UPDATE: On September 15, 2014, the CSLB confirmed that it is also expediting applications for C-61/D-21 Limited Specialty Machinery and Pumps specialty contractor during the California drought.
The California Contractors State License Board (CSLB) issued Industry Bulletin 14-11a confirming that Governor Edmund G. Brown Jr. has proclaimed a State of Emergency and directed state officials to take all necessary actions to prepare for these drought conditions. The CSLB is doing its part, expediting applications for C-57 Well Drilling Contractors. In its Industry Bulletin, the CSLB also encourages Class "A" General Engineering Contractors that are authorized to perform water supply projects (but not well drilling unless they possess a C-57 Well Drilling classification) to add the C-57 classification to their license; Class "A" contractors who would like assistance expediting this process can call (916) 255-4118 or email CSLB's Classifications Deputy. It also reminds contractors that it has a reciprocity agreement in place for well drillers who are licensed in Nevada, which will further expedite the California licensing process.
A special teleconference with state agencies is scheduled for Thursday, September 11, 2014, at 7 a.m. to discuss how to meet well drilling regulations and expand access to ground water capacity.
On August 26, 2014, the D.C. Circuit Court of Appeals decided the case of Sierra Club, et. al. v. Jewel, a case involving the National Register of Historic Places (Register), which is administered by the Department of the Interior. The Court of Appeals held, over the dissent of Senior Circuit Judge Sentelle, that the plaintiffs, a coalition of environmental groups and historic preservation organizations, have standing to challenge the decision of the Keeper of the Register that the "Blair Mountain Battlefield", the scene of a historic and violent encounter between coal miners and coal companies in the 1920's, and located in Logan County West Virginia, should not be included in the Register because the initial listing process was defective.
On June 17, 2014, Ohio Governor John Kasich signed into law Senate Bill 78, a bill making changes to Ohio's construction industry licensing law and, in particular, modifying the law regulating special construction contractors. The new law is effective September 17, 2014.
The Nevada State Contractors Board (NSCB) recently received the National Association of State Contractors Licensing Agencies' 2014 Innovation in Regulation Award, an award that recognizes innovation, creativity, and excellence in regulation of contracting/construction industries. NSCB was recognized for its efforts in 2012 to partner with The Home Depot and local building departments to create and launch PermitsUSA, a kiosk system placed in The Home Depot stores allowing contractors and consumers to purchase building permits from multiple jurisdictions at one time.
On August 22, 2014, the Texas Supreme Court issued its long-awaited decision in the case of Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch. While reversing the appellate court that affirmed the jury verdict awarding the plaintiff almost $350,000 in lost market value based on the "stigma" clinging to the land after the contamination subsided, the Court based its decision on its review and rejection of the evidence offered by the plaintiff's expert witness. Consequently, the Court postponed for another day deciding whether there is a right under Texas law to recover stigma damages.
All too often the California Contractors State License Board issues a press release confirming that it has cited numerous individuals for, among other things, unlawfully advertising as contractors when they are not, in fact, licensed contractors. However, California's Contractors' State License Law, Cal. Bus. & Prof. Code §§ 7000, et seq. (the "Law"), governs advertising by both unlicensed contractors and licensed contractors. It regulates advertising across various marketing channels, including websites, emails, directories, and other forms of communication. "Advertising" is defined broadly to include "any card, contract proposal, sign, billboard, lettering on vehicles registered in this or any other state, brochure, pamphlet, circular, newspaper, magazine, airwave or any electronic transmission, and any form of directory under any listing denoting 'Contractor' or any word or words of a similar import or meaning requesting any work for which a license is required by the Contractors License Law." 16 C.F.R. § 861; see also Bus. & Prof. Code §§ 7027.1(b), 7027.4(c). Where and how do you "advertise" your construction business and services?
The Nevada State Contractors Board (NSCB) in its Horizons (Aug. 2014) sets forth tips designed to help Nevada contractors to contract for work and to work within Nevada's contractors' law. This handy checklist may be helpful to contractors in other states as well. For additional information about Nevada's contractor's law and for the text of the statutes and administrative code cited below, refer to the NSCB Handbook, which contains Chapter 624 of the Nevada Revised Statutes (NRS) and Chapter 624 of the Nevada Administrative Code (NAC).