Posts Tagged ‘construction’

Help Me . . . Help You

Most people probably think that “Show me the money!” is the Jerry McGuire quote that best describes lawyers. But that’s not true. The quote that best describes lawyers is “help me . . . help you.” And there are many things that a client can do to help his or her lawyer in a litigation case. Here are some simple, but effective, considerations for a win-win situation. Doing these four things will make your case more efficient, and success more probable.

1. Preserve Evidence. Your lawyer can only defend and prosecute your case with evidence. Also, the failure to preserve evidence can be used against you. Thus, Rule #1: Preserve Evidence. Start by identifying all the potential locations of evidence: Paper format; electronic devices; servers; cloud/online storage; and third party sources. These should be saved to ensure that evidence is preserved. After identifying the sources of documents, help your lawyer by culling and gathering the documents. It is also useful to specifically identify the documents that you think are most relevant to the case. Likewise, identify all potential witnesses and provide your attorney with the last known contact information.

2. Know you’re objective, and what you’re willing to settle for.  At the beginning of the lawsuit, clarify your objectives. Consider the best-case outcomes; consider the worst-case outcomes. And consider the outcomes that you want to achieve. It is also best to consider what you’re willing to concede (or spend), in order to achieve the desired outcome.

3. Understand Risks. Nothing is certain. Nothing is promised. Nothing is guaranteed. Litigation is unpredictable. At least one major fact or witness will turn out completely different than anticipated. The law can be murky, too. An analogy: Imagine that you own a 2007 Honda CRV with a book value of $10,000. Now, imagine that you park the 2007 Honda CRV on the street with a “For Sale Best Offer” sign. What type of offer might you get? Would it matter if your CRV is sold in Lancaster, or Camp Hill, or Gettysburg, or West Chester? The book value might be $10,000; but the reality is that it will be sold on a specific day, at a specific location, with a specific buyer. You might get $10,000 exactly, but probably not. Likewise, the legal books might say that your dispute should be determined one way or another. But the reality is that it will depend on the specific facts of your case, with a specific judge or jury, in a specific location. Just like the sale of the CRV – litigation is not an exact formula.

4. Understand Negotiated Settlement. To avoid unpredictability, and to achieve finality, settlements are wise. But, to get something, you need to give something.

What’s Happening Now . . .

7.5 % Increase

  • Through July 2016, spending on private construction is up 7.5%, compared to 2015.
  • Spending on public construction is up 0.2%.
  • Total construction spending is up 5.6%.
  • Residential construction spending is up 6.5%.
  • Non-residential private construction spending is up 5.1%.

Source: U.S. Census Bureau, July 2016 Construction at $1,153.2 Billion Annual Rate (Sep. 1, 2016).

This article is authored by attorney Jeffrey C. Bright 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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OSHA Gets a Bigger Stick

On August 2, 2016, OSHA’s maximum penalties will increase by 78%. The penalty hike is the result of an interim final rule issued by the U.S. Department of Labor. The increase is intended to bring OSHA penalties, which have not been raised since 1990, in line with inflation.

Under the rule, serious and other than serious violations will now be capped at $12,471 per violation, rather than $7,000. Failure to abate violations, which are calculated on a per day basis, will receive an identical increase—$7,000 to $12,471. The cap on substantial penalties for repeated and willful violations increases from $70,000 per violation to $124,709.

These changes become effective for all citations beginning August 2, 2016. No matter when the violation occurred or when the investigation began, all OSHA penalties after August 1, 2016 will be calculated according to these new maximums.

OSHA’s 2015 Field Operations Manual remains the latest guidance as to how it determines an appropriate fine for violations. The primary consideration in determining penalty amounts is the “gravity of the violation,” which is determined by examining the severity of the injury that could have resulted from a violation, along with the probability that an injury could have occurred. It also allows for reductions in penalties depending on the employer’s size, whether the employer lacks a history of violations, and whether the employer was acting in good faith (i.e., wasn’t purposefully breaking the rules and had an effective safety and health management system in place).

Of course, the cheapest OSHA fine is the one never issued. Having a safety program in place and making sure that employees receive regular training on best safety practices is advisable. Companies should strive to create a culture in which safety always comes first—the increase in OSHA penalties is just one more reason why.

Violation Type Old Max Penalty New Max After August 1
Other than Serious $7,000 $12,471
Serious $7,000 $12,471
Failure to Abate $7,000 a day $12,471 a day
Repeat $70,000 $124,709
Willful $70,000 $124,709

What’s Happening Now . . .

  • The U.S. Economy grew at 1.2% for the second quarter of 2016.
  • Growth hasn’t topped 2% since the second quarter of 2015.
  • The second estimate for the second quarter will be released August 26, 2016.
  • In 2013 and 2014, quarterly growth exceeded 2% in 6 of 8 quarters.

Source: BEA, U.S. Dept. of Commerce, News Release, Nat. Income and Product Accounts  (July 29, 2016).

Newsletter written by Jeffrey C. Bright, Esq., an attorney licensed in Pennsylvania and Maryland.  For more information, contact an attorney at Harmon & Davies, P.C.

This Newsletter is not legal advice.  Unlike this Newsletter, legal advice is specifically tailored to the facts, law, and objectives unique to each circumstance.

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As drones continue to get less expensive, construction companies may find it increasingly practical to use them for anything from roof inspections to aerial photographs of jobsite progress. Until recently, the Federal Aviation Administration (“FAA”) has only permitted such commercial use of drones on a case by case basis, granting exceptions only if the drone operator had a pilot’s license. Thankfully for businesses looking to take advantage of this emerging technology, the FAA recently passed new, much less restrictive regulations for the commercial use of drones that will go into effect on August 29th of this year.

Most significantly, the new FAA drone regulations no longer require a pilot’s license for commercial operation. Instead, for an estimated cost of $150—a relative bargain compared to the time and expense of acquiring a pilot’s license—drone operators will need to pass an “aeronautical knowledge test” at an FAA exam site or operate the drone under the direct supervision of someone that has. In addition to passing that test, a prospective drone operator will need to be at least 16 years old and receive vetting by the Transportation Security Administration. Those who already have a pilot’s license (not including a student pilot’s certificate) and have completed a flight review within the last two years will only need to pass an online test to receive commercial drone operation certification.

Beyond the certification process, the new regulations also include several rules for safe flying. The good news is that none of these requirements should place any real burden on a construction company’s most common uses of a drone.

The rules require that the drone weigh less than 55 lbs., which is a weight that nearly every commercially available drone is well under. As for the scope of operations, the rules require drone operators to fly their aircraft only during daylight hours, under 400 feet above ground level or 400 feet above a building, while not travelling more than 100 miles per hour. Additionally, the drone cannot operate over top of any person not directly participating in the flight that is not inside a structure or vehicle. The drone must also always remain within the visual line of sight of either the operator or a single visual observer. None of those restrictions should at all inhibit aerial photography—the most common use of drones in the construction industry.

Those eager to begin studying for the commercial drone operator exam, which will become available soon after the new rules take effect, can do so by taking the online test made for people who already have a pilot’s license. Though passing the exam without a pilot’s license will not certify you as a drone operator, the FAA does recommend it as a “self-study” resource for the exam that will.

This article is intended to provide general information, not a specific legal opinion or advice. Any particular questions should be directed to your legal counsel. If you do not have legal counsel, please feel free to contact Harmon & Davies, P.C.

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A Construction Law Newsletter Provided by Harmon & Davies, P.C.

Legal Punchlist
What’s Happening Now . . .


·         Increase in construction spending, year-to-date.

·         The first 10 months of 2015 have seen $888.1 billion in construction spending.

·         The first 10 months of 2014 were $802.3 billion.

Source: U.S. Census Bureau News, October 2015 Construction at $1,107.4 Billion Annual Rate, U.S. Dept. of Commerce (Dec. 1, 2015).

Mediation, Arbitration, and Litigation

Construction contracts often reference either mediation, arbitration, or litigation. But what’s the difference between these three?

Mediation is the use of a third-party to conduct an informal meeting for the purpose of resolving the dispute. There is no judge or jury. It is merely a mechanism to get all the parties in the same room.

Typically, but not always, the mediator is selected and hired by the parties to lead the settlement discussions. It’s also common for mediation conferences to start with all parties in a single room, discussing their grievances and desired outcomes. After the initial group discussion, it is common for each party to relocate to separate rooms, and the mediator will meet with each party individually, to facilitate points for discussion. Generally, a mediator is hoping to bring each party towards middle ground in search of a negotiated resolution.


It is important to ensure that mediation is conducted under the confines of 42 Pa.C.S.A. § 5949. This statute provides that the communications made in mediation are inadmissible as evidence in a court of law. This protection allows the parties to speak freely, in an effort to resolve the dispute. Settlement discussions are also inadmissible in a court of law, under Pa.R.E. 408. Best practice is for all parties to agree in advance, as a ground-rule of mediation, as to whether the statements are fair game for use in court at a later point.

Mediation does not result in a binding decision. It is merely an attempt to facilitate a negotiated settlement. Arbitration, on the other hand, is a formal procedure that results in a binding decision. Arbitration does not use a judge or jury. Instead, an arbitrator presides over the arbitration and acts as the “judge and factfinder.” Arbitrators are usually practicing attorneys who likely have a concentration or level of expertise in the specific area of applicable law. Arbitration is less formal than a trial in court; it is often held in a private office, or a conference room. Although less formal than a trial, the litigants must still present testimony and evidence, in a similar manner as if presenting their case in court.

Sometimes, people use the terms “binding” or “non-binding” arbitration. These are misnomers. By definition, all arbitration is binding. If it is “non-binding arbitration” then, it is better defined as mediation. When agreeing to participate in mediation or arbitration, make sure that it is fully understood and agreed that the process is either binding or non-binding. The best way to make this clear is to use the proper terms: mediation is a non-binding; arbitration results in a binding decision. This should be clarified in writing, between the parties, as a ground-rule for participating in the process.

Litigation, in contrast, is the use of the court process. At the time of entering the contract, and at the time of any dispute arising, it is important to know whether the contract requires mediation, arbitration, or litigation.

Newsletter written by Jeffrey C. Bright, Esq. , an attorney licensed in Pennsylvania and Maryland. For more information, contact an attorney at Harmon & Davies, P.C.

Employment          Construction           Business

2306 Columbia Ave. | Lancaster, PA 17603

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Legal Punchlist November 2015

Legal Punchlist Newsletter (Nov. 2015)

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Legal Punchlist Newsletter

Legal Punchlist Newsletter (Oct. 2015)




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Legal Punchlist Newsletter

Click to read our Legal Punchlist Newsletter4-30-15 Legal Punchlist Newsletter (Apr. 2015)



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The U.S. District Court for the Eastern District of Virginia recently held that a laborer hired by a subcontractor cannot sue the construction project’s general contractor for same-sex harassment. In the lawsuit, Matthew Allen alleged that an unidentified man from another company made sexual advances towards him. After reporting the incident to the general contractor, D.A. Foster Company, Inc., the man who allegedly made the advances was ejected from the worksite. Allen alleged, however, that he was continually harassed by coworkers who had heard about the incident. Allen filed suit against the general contractor, and Barnes Excavating, the subcontractor, alleging, among other counts, discrimination, hostile work environment, retaliation, and retaliatory termination in violation of Title VII of the Civil Rights Act.

The court held that claims against an employer under Title VII may only be brought by an employee, not an independent contractor, against an employer. To determine whether the claimant is an employee or independent contractor, courts weigh several factors of the conventional master-servant relationship. While no one factor is determinative, several factors are considered, including: the workers skill required; who provides the tools required; location of the work; duration of the relationship; the hiring party’s right to assign additional projects to the hired party; the extent of the hired party’s discretion over working time and hours; the method of payment; and whether the work is part of the regular business activities of the hiring party.

In the case at hand, D.A. Foster was the general contractor who subcontracted excavating work to Barnes. Barnes directly hired Allen as a laborer and assigned Allen to work on the project supervised by D.A. Foster. Although D.A. Foster provided some guidance and training for the project, and the company does regularly perform work in this industry, the level of control over Allen did not rise to the extent necessary to establish an employee-employer relationship. The court held that, with respect to D.A. Foster, Allen was an independent contractor. Most tools were provided to Allen by Barnes Excavating, not Foster. Allen worked under the direct supervision of and was paid by Barnes. The court found that Allen could not reasonably believe that he was an employee of D.A. Foster. Thus, the court granted summary judgment in favor of D.A. Foster.

While in the case at hand the general contractor was not subject to liability on the claim, employers still need to be weary of the current trend to try towards expanding the definition of who is the “employer.” Particular attention should continue to be paid to the IRS independent contractor test and, in particular, the most recent movement of the NLRB to redefine joint-employer status. The consequences of misclassifying an employee as an independent contractor can be significant. The case should also serve as a reminder to all contractors that they need to take steps to make sure that their jobsites are free from any kind of harassment.

This article is authored by attorney Lori L. Buntman 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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New Mechanics’ Lien Law Amendments

Last month, the General Assembly amended the Pennsylvania Mechanics’ Lien Law. The amendments will go into effect on September 7, 2014, which is 60 days after the passage date.

New Homeowner Protections. It has long been the law in Pennsylvania that subcontractors could lien property, even if the owner already made payment to the general contractor for the work. See Fahringer Corp. v. Newman, 1 Pa. D.&C.3d 115, 118 (C.P. Somerset Co. 1976). Under this old law, because an owner’s payment to a general contractor is not a defense to a lien, an owner could ultimately pay twice for the same work.

The revised Mechanics’ Lien Law changes this. Now, a subcontractor cannot lien residential property if the owner paid the full contract price to the general contractor. 49 P.S. § 1301 (effective September 7, 2014).

This new law is only applicable to residential properties. Regardless of this new protection, it is still advisable for owners to require lien waivers and diligent payment-tracking processes. For subcontractors, it is now very important to immediately address any delinquent payment issues.

New Lender Protections. The lending and title insurance industries was quite anxious after the 2012 Pennsylvania Superior Court decision, Commerce Bank v. Kessler, 46 A.3d 724. In Commerce Bank, the owner contracted to build a luxury home. The house was fully constructed; however, the owner failed to make payments to the homebuilder, and also failed to make payments on the mortgage. Both the bank and the homebuilder obtained default judgments. The bank believed its mortgage had priority lien rights against the property, based upon a provision in the Mechanics’ Lien Law.

The appellate court disagreed. It ruled that the mechanic’s lien took priority lien status over the mortgage. The court reasoned that the Mechanics’ Lien Law only affords priority lien status to open-end mortgages if the loan is used solely for “erection, construction, alteration, or repair.” As is typical, the loan in Commerce Bank included disbursements for tax claims, closing costs, pay-off of a prior mortgage, and other liens. Because of these other disbursements, the mortgage did not receive priority status.

Banks need not worry anymore. The amended Mechanics’ Lien Law provides that open-end mortgages take priority so long as 60% of the loan proceeds, at a minimum, go towards construction costs. The amendment also broadens the definition of construction costs to include common items paid by the loan, such as taxes, surveys, attorney’s fees, engineering fees, architectural fees, satisfaction of old mortgages, etc.

Entering contracts, getting paid, making payments, and litigating lien rights can be complicated. Owners, contractors, subcontractors, and lenders should double-check their contracts and seek proper legal advice.

What’s Happening Now . . .


Construction Industry Unemployment Rate (unadjusted).

  • The construction industry added 22,000 jobs last month. This is the lowest unemployment rate in the construction industry since November 2007.

Source: Bureau of Labor Statistics, Series ID LNU04032231.  

* This Blog is not legal advice. Unlike this Blog, legal advice is specifically tailored to the facts, law, and objectives unique to each circumstance. To join or remove yourself from the subscription list, email or call 717-291-2236.


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Many of you may have attended 4th of July parties with fireworks as we celebrated our country’s birthday. While we want fireworks at a 4th of July party, you do not want them on your jobsite. But your friends in organized labor may have other ideas. At the dawn of the Obama administration in January 2009, we expected a significant push by organized labor to leverage its success in the 2008 elections to try to regain lost ground in terms of private sector union membership. Instead, the focus turned to healthcare and a number of issues that prevented the passage of laws like the Employee Free Choice Act that would have dramatically simplified union organizing. President Obama also made a mess through his recess appointments to the National Labor Relations Board which, as of the writing, are before the Supreme Court with three lower courts having held them to be unconstitutional.

Now, however, contractors need to be aware of the fact that the stars are aligned in such a way that you should expect to see some type of union activity on your jobsites over the next several months. The NLRB is fully staffed with the most pro-union majority in its history. It is aggressively moving forward to give unions additional weapons to use on jobsites such as bannering, street theater and the ever popular large inflatable rat. The NLRB has also given unions almost complete control over the scope of the bargaining unit they can try to organize. It is expected that the Department of Labor will soon try to restrict the access of employers to effective legal representation in dealing with these types of issues. Since all of these administrative actions could be reversed with the election of a pro-business candidate in 2016, organized labor is ready to try to put the remaining days of the Obama administration to good use.

NOW is the time for you to learn about the variety of tactics unions might employ, where and how they might be utilized and what you can do to prepare for them. On Tuesday July 15, 2014 from 7:00am – 8:30am I will be presenting an interactive seminar on this topic. This session is designed for field superintendents, project managers and company executives. Don’t be caught unprepared!


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