Labor and Employment Issues

On March 11, 2022, the Department of Labor (“DOL”) proposed reverting the definition of “prevailing wage” under the Davis-Bacon Act to a definition used over 40 years ago. According to the DOL, the proposal is meant to modernize the law and “reflect better the needs of workers in the construction industry and planned federal construction investments.”[1]
Continue Reading Turning Back the Clock: DOL Proposes Previous Davis-Bacon Prevailing Wage Definition

Binding arbitration of construction disputes is frequently required by standard industry contracts. For example, the contract forms published by the American Institute of Architects either require or provide an option for arbitration under the Construction Industry Rules of the American Arbitration Association (“AAA”). The latter rules authorize the arbitrator to decide whether the contractual arbitration agreement is enforceable. (See, e.g. Rule 9 of AAA Construction Industry Rules). However some courts have decided this issue should be determined by the courts, rather than the arbitrator.
Continue Reading Arbitrators can decide validity of arbitration provision in construction contracts

This article is the sixth in a series summarizing construction law developments for 2010.

By Candace Matson, Harold Hamersmith & Helen Lauderdale

  1. Alameda County Joint Apprenticeship and Training Committee v. Roadway Electrical Works Inc., 186 Cal. App. 4th 185 (1st Dist. June 2010)

A general contractor and its electrical subcontractor working on the project to rebuild the Bay Bridge were sued by various electrical unions, electrical contractors, and electrical contractors’ associations. The plaintiffs asserted claims for unfair and unlawful competition under Business and Professions Code Section 17200 claiming that that defendants were using unauthorized workers to perform work that called for certified electricians under Labor Code Section 3099. The defendants succeeded in obtaining the dismissal of the lawsuit by arguing that the plaintiffs’ claims raised issues with respect to the proper classification of workers, that it was up to the Department of Industrial Relations ("DIR") in the first instance to determine the scope of work that must be performed by certified electricians, and that plaintiffs had failed to exhaust their administrative remedies with the DIR before filing suit.
 Continue Reading The Year 2010 In Review: Prevailing Wage & Employment Law

By Richard M. Freeman

In December, 2006, the Department of Industrial Relations adopted a new, official position which could adversely affect the real estate development and construction community.  Its new position is that any type of public subsidy, waiver of permitting fees, discount or assistance from a public body to a developer does not have to be for the purpose of facilitating construction in order for the requirement to be imposed that prevailing wages (i.e., the union wage rates) be paid to the construction workers on the any project within the development.  In 2005, the California Supreme Court, in interpreting California Labor Code § 1720(a)(1), ruled that in order for the prevailing wage requirement to be imposed, any public assistance or benefit under § 1720(a)(1) had to be provided to the developer for the purpose of facilitating the construction.  Even though the amendments to the prevailing wage law under SB975 did not change the language in § 1720(a)(1) of the Labor Code, the DIR has chosen to take the position that the City of Long Beach decision is no longer good law and that any public benefit to a developer relative to its overall development, converts the development into a prevailing wage project.  The DIR’s decision is being appealed.  However, this new interpretation makes its increasingly important for developers, contractors, and others to analyze very carefully what the ramifications of any public assistance are to a real estate development.Continue Reading California Department of Industrial Relations Expands Prevailing Wage Coverage