Vandeventer Black's Construction and Public Contracts Department is the practice group within Vandeventer Black LLP that focuses on serving those in the construction industry. We currently have offices in Norfolk and Richmond, VA, the OBX and Raleigh, NC, Pasadena, CA and Hamburg, Germany. For more information about Vandeventer Black, clink on the VB logo.

Thursday, April 10, 2014

Employee Bound By Arbitration Agreement in Employment Application

Last month Judge Conrad of the Western District of Virginia held that an employee was required to arbitrate his claims because the employees signed an employment application agreeing if employed to be bound by the company's Dispute Resolution Process (DRP), which included arbitration. The employee had denied signing the DRP agreement itself, but admitted he signed the employment application referencing it. In addition to finding the employment application was an agreement to arbitrate, Judge Conrad rejected the employee's arguments that: 1) the DRP violated either the National Labor Relations Act (NLRA) or the Norris-LaGuardia Act of 1932 (NLGA); 2) the arbitration agreement was unconscionable; or 3) the arbitration agreement was a contract of adhesion. While all arbitration agreements stand or fall on individual verbiage and facts, this case provides helpful guidance to employers on developing enforceable and binding arbitration agreements for its employees, and in particular establishing binding arbitration as early as the employment application itself.

Monday, April 7, 2014

Fourth Circuit Upholds Dismissal of EEOC Claims and EEOC's Obligation to Pay Attorneys Fees

The Fourth Circuit Court of Appeals recently provided a warning case to the United States Equal Employment Opportunity Commission (EEOC) about better vetting suits against employers, and acting timely for those the EEOC deems with merit. In the recently decided appeal of EEOC v. Porpoak Logistics, Inc., decided March 25, 2014 (4th Cir. Appeal No. 13-1687), the Fourth Circuit affirmed the district court's dismissal of an EEOC suit filed some six and a half years after the originally filed discrimination charges, finding that the employer had been unfairly prejudiced by the EEOC's delay. The Fourth Circuit also upheld the district court's award to the employer of its attorney's fees.

Among other things, because of the delay, important witnesses were no longer available or had "faded memories" and the company had already destroyed important documents during routine document destruction. Additionally, there were questionable underlying merits to the claim itself. While the EEOC defended its actions in part on its overburdened staff, the Fourth Circuit wholly rejected that as a defense, with one of the justices noting that private companies would not even dream about arguing such a defense to explain misconduct.

Certainly the EEOC performs necessary, important functions; but the Porpoak decision should help ensure that in performing those functions the EEOC gives greater consideration to only pursuing fully vetted claims, and if it chooses to pursue them then doing so promptly.

Thursday, March 13, 2014

Carnell Construction: Major Virginia Procurement Decision Issued by U.S. Fourth Circuit Affecting Claim Recovery Under VPPA

Last week the United States Court of Appeals for the Fourth Circuit issued a decision in the Case of Carnell Construction Corp. v. Danville Redevelopment & Housing Authority with significant implication regarding Virginia Public Procurement Act (VPPA) claims. The case has a detailed history and has been sent back to the lower court for the fourth time. While it has an important holding regarding contractor discrimination claims that adopts the ability of entities, and not just individuals, to make discrimination based claims, in many ways the holdings affecting the contractor's VPPA claims are likely to have more significant implications for all contractors performing Virginia public body work. Below is a Legal Developments summary regarding the latest Carnell decision prepared by the Vandeventer Black Construction and Public Contracts Team:

Tuesday, February 25, 2014

GAO Decides Offeror Affiliates Should be Considered in Experience Evaluation

The Government Accountability Office recently considered whether a offeror's affiliate companies should be considered by the government in evaluating the offeror's experience in Iyabak Constr. LLC, GAO, B-409196, 2/6/14, decision released 2/11/14. The solicitation should past performance experience for similar projects within the last five years, but experience examples were limited to projects performed by the firms submitting the offers and the government did not consider Iyabak's affiliates experiences. Iyabak protested and the GAO decided that the restrictions imposed were unnecessary, recommending the government's modification of the RFP to consider the experience and past performance of offerors' affiliates showing a firm commitment to be meaningfully involved in contract performance (but noting it would be improper to consider affiliates that were not going to be meaningfully involved).

Thursday, February 13, 2014

President Unilaterally Raises Minimum Wage for Federal Contracts

On February 12, 2014, President Obama signed his promised Executive Order increasing the minimum wage to $10.10 per hour for workers under new and renegotiated federal contracts. The Executive Order also increases the minimum wage for tipped workers starting January 1, 2015. The new wage rates will raise with inflation each year. Covered workers include those in the construction and service industries.

The related issues are many; but two immediate concerns for employers are: 1) the likelihood that workers on different projects / contracts will have different wages; and 2) contractors may be forced to raise the pay of workers whose wages are at or near $10 an hour to maintain the differential from newer or less skilled employees.

Contractors with unionized workforces tied to the minimum wage may be forced to renegotiate collective bargaining agreements. How else this will indirectly affect the construction and service industries remains to be seen.

Friday, January 10, 2014

Party Relationships: Contract Form Can Dictate

When parties go into relationships they often think the relationship is one thing; but legally the relationship may be another.  Judge Hughes' recent decision in the case of PEAC Consulting, LLC v. The Ridley Group & Associates, et al., decided September 20, 2013 (CL12-4821, Richmond Circuit Court) emphasizes the importance to the relationship question of the documents and titles actually used by the parties themselves when they create the relationship. In that case, the plaintiff claimed there was a joint venture relationship with another company in seeking award of a public procurement; however, the trial court disagreed because the proposal that was submitted to the public body identified the parties as "two primary subcontractors." While the court allowed plaintiff's claims to proceeds on other basis, the distinction between joint venturers and subcontractors can be significant; particularly with respect to rights, obligations, and damages. Bottom line, what you call yourself matters, so carefully chose your words, and seek appropriate legal counsel regarding the legal consequences, advantages, and disadvantages of what you could or do choose.

Monday, January 6, 2014

Oh Oh . . . Did I Really Just Waive My Coverage?

Incidents are common place on construction sites. Unfortunately, sometimes things happen that damage the work or cause injury. Typically there is insurance coverage that covers these incidents, but a recent Federal Court decision highlights the pitfalls to the insured taking unilateral action to resolve associated claims, if the insured intends to pursue a related claim against the insurance carrier.

That case is the Fourth Circuit Court of Appeals decision decided on December 16, 2013, Case No. 12-2415 in Perini/Thompkins Joint Venture v. ACE American Insurance Company.  The JV was the construction manager for that project.  The owner had purchased Owner Controlled Insurance through ACE. The JV was an additional insured under that policy.

During construction a 2,400 ton glass atrium was damage.  The JV incurred significant related monetary losses for the damages, and also the related time impacts. Related project litigation ensued between the JV and the owner, that eventually resulted in a settlement of the JV's claims. The JV did not notify ACE of that lawsuit or the settlement until after the settlement.

Six months after the settlement, and nearly two years after the collapse, the JV send a demand letter to ACE advising that to the extent the JV's builder's risk carrier did not pay the JV's collapse related claim then the JV expected ACE to pay. That letter was the first formal written demand to ACE by the JV. Eventually the JV sued ACE and ACE moved to dismiss on the grounds the JV settled the underlying claim without prior notice to ACE.

Applying MD law, but at its basic level merely interpreting the insurance contract as written, the Fourth Circuit held the JV waived any coverage claims against ACE by settling its underlying claim with the owner without first notifying ACE, and that ACE had not intentionally relinquished its rights under that contract by any of its related acts or omissions.

While facts and policy language will differ, the basic premise of this case stands as a warning to those who are contemplating a contractual settlement of claims when those same claims might also have associated insurance claims. Bottom line, ignore insurance policies and insurers at one's peril.