Harmon & Davies, P.C.

A few weeks ago, in Fedor v. Van Note-Harvey Associates, et al., the Eastern District of Pennsylvania reaffirmed the long-standing rule in Pennsylvania that employers of independent contractors are not typically liable for the negligence the contractor.  In that case the plaintiff, an injured roofer, unsuccessfully argued that three exceptions to the rule applied.  Although the roofer lost his case, it is important for owners and property managers to be mindful of the three exceptions. 

Exception No. 1:  Peculiar Risk

A special danger or peculiar risk exists where: “a reasonable employer of a  contractor would foresee the risk at the time the contract was executed and would recognize the need to take special measures.   

• The Risk needs to be different from the usual and ordinary risk associated with the general type of work done  
• Circumstances need to be unusually dangerous  
• Can’t be routine construction work 
• Violations of safety conditions are not a basis for invoking the doctrine 
• Activity itself must be of increased risk-manner in which the worker engages in that activity is not relevant 

 Exception No. 2:  Retained Control

 A second exception to the general rule of employer nonliability exists where the owner retains sufficient control of the work to be legally responsible for the harm to plaintiff.  To demonstrate sufficient control to warrant application of the exception, a plaintiff needs to establish all or some of the following:

• Contractual provisions that give the owner control over the manner, method, and operative details for the work 
• The owner exercised actual control over the work 
• Excludes a property owner retaining a certain degree of authority over safety issues 

Exception No. 3:  Negligent Hiring

 Section 411 of the Restatement (Second) of Torts provides that “[a]n employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or (b) to perform any duty which the employer owes to third persons.” Rest. (Second) Torts § 411. 

• In Pennsylvania it has been held that the scope of section 411 is properly limited to claims by third persons other than employees of the negligent independent contractor itself.   

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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I know, I know – today is Black Friday so you may think we’re jumping the gun by discussing Cyber Monday.  In fact, many of our readers may be shopping as we speak and therefore missing our blog today.  But those of you who aren’t battling the bargain-hungry shoppers in stores today will likely understand the reasoning behind today’s post.  Cyber Monday replaces Black Friday in many shoppers’ books – and with good reason.

Cyber Monday, the Monday following Black Friday, is a marketing term used to signal the internet’s equivalent of Black Friday.  In 2006, online shopping increased by 25% on Cyber Monday, generating $608 million in sales.  In 2009, the number was up to $887 million.  This number will likely only continue to rise as stores offer free shipping at any price and rival the sales many saw on the previous Friday.  Last year, 96.5 million Americans shopped online during Cyber Monday while only 79 million shopped in actual stores on Black Friday.  It looks like Cyber Monday is actually replacing Black Friday.

What does this mean to you?  Well, last year, 52.7% of purchases online on Cyber Monday occurred from work computers.  Understandably, many employers worry that this puts company networks at risk due to increased spam, viruses and phishing attacks.  Of possibly even greater concern is the likelihood of lower productivity.  CareerBuilder found that employers lost $580 million in productivity on Cyber Monday in 2008.  CareerBuilder has further estimated that of those shopping online, 43% will spend at least one hour doing so and 23% will spend two hours or more shopping from their workplace computer.

But is cracking down on computer use on Black Monday really worth it?  Probably not.  Allowing employees to do some of their holiday shopping from work is an easy, cheap way to boost employee morale.  Trying to prohibit computer use for personal endeavors such as shopping may appear rigid and enforce a divide between business and personal lives that many employees and employers are abandoning.  Many employees no longer follow the strict 9-5 workday.  More and more employees are doing work during off hours at home while enjoying some time at work taking care of personal business.  Allowing this flexibility may actually improve productivity.

Instead of trying to strictly enforce a “work related internet use only” policy, which also means you must be prepared to discipline employees accordingly, allowing limited use for personal reasons shows that the employer acknowledges that employees are responsible enough to make good decisions with respect to getting their work completed.  In turn, employees will feel more valued.  Another added benefit to allowing limited personal internet use is that employees will be less likely to take days off in order to get their shopping completed in time for the holidays.

Of course, if work is not being completed adequately or abuse of the policy is apparent, discipline may be appropriate or the problem may be dealt with in terms of a performance issue.

Regardless of how you plan to handle Monday at your place of business, knowledge of the costs and benefits are always useful.  And you never know; you may just find that perfect holiday gift.

This article is authored by attorney Samantha Sherwood Bononno and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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You don’t have to look very far to see that the trend of “going green” is really catching on. In fact, some local businesses and government offices right here in our area are taking steps to save energy…and even your money. You may want to jump on this bandwagon.

Berks County has partnered with an energy service company in an effort to come up with a comprehensive plan to cut the county’s energy consumption. And with good reason. The combined monthly electric bill for the Berks County Services Center and the Courthouse is $75,000. With rate caps expiring this year, the bill is only going to increase. 

Over the next 15 years, this initiative should save $21 million in taxpayer dollars. That’s right – $21 million. The county is making many changes, large and small alike. New lighting throughout county buildings is expected to save more than $142,000 a year in lighting bills alone. In an effort to lead by example, employees are being informed on how their actions can save energy as well. For example, the difference in using a screen saver and turning your computer off is over 20 watts. The county is on to something by addressing the issue from both angles; saving energy and our taxpayer dollars is something we can all appreciate.

Moving southwest, businesses and organizations in Lancaster County are also taking the initiative to go green. One of our own clients, Warfel Construction Company, is the first contractor in Pennsylvania to achieve a GreenPlus Certification from the Institute for Sustainable Development. Warfel offers sustainable designs and LEED (Leadership in Energy and Environmental Design) Certification to their clients, both of which are becoming more and more important to developers today.

Not only do they build green, but Warfel has also made their own facility eco-friendly in an effort to show how attainable it is to build and renovate with green elements. Carpeted floor tiles are made from recycled materials while hard flooring is made from rapidly renewable materials. Automatic lighting based on motion detection is found throughout the building. Even the men’s room is green; it contains waterless urinals. Talk about walking the walk.

Businesses in Lancaster County that are interested in going green themselves or offering green services have many resources to help them do so. One of these is the Lancaster Chamber of Commerce and Industry. They are committed to connecting businesses to organizations and programs that can help them begin their own green initiative. They currently offer connections to certification organizations such as Green Seal and Green Plus and also provide a library of best practices that Lancaster businesses are implementing. The Chamber also supplies an extensive list of state and national resources to help you get started. For more information, click here.

 Whether you want to save your own or your client’s money, going green is a smart place to start. Not only will it keep your pockets a little more full in the long run, but it also benefits everyone around you. It is impossible to ignore the effects of our energy-driven society so it’s nice to know that we’re living and working in a place that acknowledges the necessity and benefits of being environmentally conscious. Whether you’re a county employee, a business owner or just a member of the community, we can all appreciate that our fellow citizens are forging ahead in this innovative area.

This article is authored by attorney Samantha S. Bononno and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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It seems like politicians have become downright chummy with “misnomer”.  In fact, I think they’re married to the word. Because every piece of legislation proposed as of late seems to be just that – a misnomer.  Like the “Employee Free Choice Act”. Quite the misnomer, since it actually proposes taking away the freedom of employees to make their choice in private. Strange when, for political elections, we still have the right to vote in private. So why wouldn’t the politicians, elected themselves through such a process, want to allow employees to continue to have such a right in the workplace? Thankfully, as Americans, we like to keep things short; we like acronyms. Love them, in fact, almost as much as politicians love misnomers. So proposed legislation like the “Employee Free Choice Act” gets cut down to “EFCA”. And, if you’re in my seat, we cut it down even further to “Act”.

Another recent misnomer is the “Patient Protection and Affordable Care Act”.  A mouthful, isn’t it? Think we’ll ever refer to it by its “given name”? Never. It isn’t referred to as the PPACA though, either. Most folks simply refer to it as “Obamacare”. I’ve got another word for it…but I probably shouldn’t use it here.

If a misnomer is an error in naming something, then there are more errors than just the name associated with “Obamacare”. For example, one of the promises President Obama made while lobbying for the passage of Obamacare was that “if you like your health care plan, you will be able to keep your health care plan.”  True?  Doesn’t seem so. Most Americans who have a health care plan by virtue of their employment will not be able to keep their current plan. Folks thought employer-based plans would achieve “grandfathered” status and, thus, wouldn’t be impacted by Obamacare. Unfortunately, for employers and employees alike, that simply won’t be the case for the vast majority of such plans.

Alterations or changes to a plan will cause it to lose its “grandfathered” status. And alterations and changes to health care plans are standard practice these days. In the last decade, year-to-year changes to employer-based health care plans have become the norm – because of the cost of insurance now, it’s what businesses have to do in order to provide reasonable health care to its employees. So, what kind of alterations and changes are we talking about?

Well, most obviously, if the employer changes its health care provider, “grandfathered” status is lost. If the deductible for your plan changes, “grandfathered” status is lost. If the percentage of the insurance paid by the employer/employee changes, you guessed it, the “grandfathered” status is lost. And if the “grandfathered” status is lost, then so is the plan. And small businesses are already struggling to provide health care to its employees. Under the new regulatory scheme, it’s believed that small businesses will be forced to drop health care coverage all together. This means that more Americans will be required to obtain coverage on their own. Something that has never been considered an affordable option.

As to how far-reaching the impact of Obamacare will be on the average American, I don’t think we’ll know that until 2014 when the majority of the “reforms”, and the penalties, take effect.

Of course, there’s still something we can do between now and then. We can make our views on the legislation known to the folks that are representing us. And we can get out and vote. Don’t underestimate the power – and the importance – of voting, particularly this November.

This article is authored by attorney Susan M. Zeamer and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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While my previous posts addressed how to avoid construction claims, today’s blog explores two types of claims that you can assert or have asserted against you.  These claims include payment and defective performance claims.  Delay claims are the topic of a future post.   

     A.      Payment Claims:  Show Me the Money

Simply stated, payment claims arise over a failure to make a payment.  And while payment may seem straightforward, things get befuddled when the parties can’t agree on what is owed for changes and extras. 

Carefully drafted clauses regarding changes can help prevent unexpected claims for additional costs allegedly not compensated for in the change order.  This scenario may also be curtailed by adding language to your standard change order form, expressly excluding any contention that notice requirements were waived by the issuance of the change order and mandating strict compliance with all contractual requirements related to change orders. 

     B.      Defective Performance Claims:  But that’s Not the Color I Specified

Defective performance claims occur as a result of poor quality workmanship and non-conformance to plans and specifications. 

Under what is known as the doctrine of waste, damages in a defective performance claim are awarded based upon the cost to correct the defective work or the diminution in market value, whichever is less.  Let me explain: 

Let’s say that you are building a house and you tell the GC to install brand-name fans.  Instead the GC installs generic fans.  If it costs more for the GC to remove the generic fans and install the brand-name fans, than the resulting diminution in the value of the home, the homeowner will only be awarded damages in the amount of the diminution.  This is why most owners will want to argue that the resulting diminution in value goes far beyond the cost of repairs. 

While the doctrine of waste may run counter to our playground sense of justice, at some level it makes sense.  It’s illogical for an entire dividing wall to be ripped down just because it was misplaced by an inch- unless the misplaced wall substantially diminished the value of the structure. 

Luckily, the law gives an owner a number of remedies to address defective performance including breach of contract, breach of warranty and representation, negligent construction, and negligent misrepresentation and/or fraud. 

An owner may also withhold payment for defective work, but if this option is elected, the owner should inform the contractor of its reason and if possible, explain the basis for the amount withheld. 

Check back next week for our blog on delay claims. 

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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