This post was authored by Jonathan H. Schaefer who is a member of Robinson+Cole’s Environmental, Energy + Telecommunications Group.

On December 11, 2024, the Occupational Safety and Health Administration (OSHA) announced it finalized a revision to the personal protective equipment (PPE) standard for the construction industry. The final rule adds specific language to the existing standard requiring employers to provide properly fitting PPE for construction industry workers. This change aligns the construction industry with the standards in place for the general industry.

According to OSHA, many types of PPE must properly fit workers. Improperly sized PPE can ineffectively protect workers, creating new hazards for them, such as oversized gloves or protective clothing being caught in machinery and discouraging use because of discomfort or poor fit. OSHA stated that the longstanding issue with improperly fitting PPE particularly impacted women, as well as physically smaller or larger workers. 

Starting in January, construction employers will need to give their workers well-fitting safety gear. Among other equipment, this includes gloves, high-visibility vests, goggles, fall protection harnesses, and helmets that “properly fit” the workers. However, the final rule does not provide clear guidance on how employers or workers determine if PPE properly fits. OSHA only provided a limited number of examples of ill-fitting gear, such as long pants legs that could lead to the employee tripping and welding gloves too large for the employee to pick up items.

Publishing this final rule coincides with a post-election push by federal agencies to finalize major agenda items before January. However, the PPE final rule will still be subject to the Congressional Review Act and thus subject to being overturned by the next administration. That being said, the rule has enjoyed support from both industry and labor.

This post is also being shared on our Environmental Law + blog. If you’re interested in getting updates on legal news and perspectives and related issues impacting the environmental industry, we invite you to subscribe to the blog.

This post was co-authored by Abby M. Warren and Christopher A. Costain who are members of Robinson+Cole’s Labor, Employment, Benefits + Immigration Group.

As most manufacturers know, the Connecticut Legislature passed significant amendments to the Connecticut Paid Sick Leave (PSL) law, which are set to go into effect on January 1, 2025, and pertains to employers with 25 or more employees. Just in time, the Connecticut Department of Labor (DOL) has published important guidance (Guidance) regarding these wide-ranging changes, which manufacturers may find helpful as they revise policies and procedures to ensure compliance with these significant amendments. Below are some of the most essential parts of the DOL’s guidance that may impact manufacturers:

  • Two Different “120-Day” Rules in the Amended Law

The amended PSL law provides that covered employees are entitled to use accrued paid sick leave on or after 120 calendar days of employment, meaning they have been “on payroll” for three months. The Guidance clarifies that the 120 calendar days begin on the employee’s hire date and that employees who meet the 120-day threshold as of January 1, 2025, do not need to wait to use accrued paid sick leave. Similarly, employees who began their employment prior to January 1, 2025, but have not yet worked 120 days must wait until their 120th day of employment before using accrued paid sick leave.

Also, under the amended law, “seasonal employees,” defined as employees who work 120 or fewer days in a year, are not covered by the new law. The critical distinction between the new hire waiting period and the seasonal employee workday threshold is that new hires must wait 120 calendar days before using accrued paid sick leave. In contrast, seasonal employees are not eligible for paid sick leave until they have worked 121 or more days in a year.

The Guidance clarifies that if a seasonal employee remains employed and works 121 or more days in a year, they will become eligible for accrued paid sick leave. Importantly, in such an instance, a formerly “seasonal” employee would be entitled to use accrued paid sick leave beginning on workday 121 and thereafter, based on the hours worked in their first 120 days.

  • Documentation and Notice Prohibited

Under the amended PSL law, employers cannot require documentation of paid sick leave use from employees. Instead, employers can only ask employees if they are taking time off pursuant to the PSL law but cannot gather specific details or documentation to support the request. The Guidance states that if an employee refuses to provide enough information for an employer to determine that the absence is covered under the PSL law, the employer should not apply the employee’s accrued paid leave to the absence.

The Guidance also clarifies that if an employee uses paid sick leave concurrently with a law that permits return-to-work or fitness-for-duty certifications, such as the federal or state Family and Medical Leave Act or the Americans with Disabilities Act, an employer may request such documentation. However, if such documentation is requested, it may not be used to deny an employee’s use of paid sick leave.

The Guidance also clarified employers may require employees to provide notice “as soon as practicable” of the need to use paid sick leave as it relates to notice that employees must provide in advance of using paid sick leave, so long as employees are not disciplined for failing to follow the employer’s requirements regarding the timing of the notice.

  • Ensuring Compliance with Existing PTO Policies

Concerning manufacturers who may have a Paid Time Off (PTO) policy, the Guidance clarifies that employees who use all of their accrued PTO by taking a family vacation will be deemed to have exhausted their 40 hours of paid sick leave. For future absences in the same year that would have otherwise qualified as a paid sick leave-related absence, the employer would be permitted to require advance notice and documentation, and the other requirements of the PSL law would not need to be satisfied.

However, the DOL cautions that an employee’s absences related to paid sick leave should not be treated as an “occurrence” under the employer’s attendance policy. That being said, employers may have a policy about using sick time as illustrated above and beyond the 40 hours required by law (and presumably, could discipline for various reasons when time is used above the 40-hour threshold).

  • Carrying Over or Paying Out

The amended PSL law provides that employees may carry over up to 40 hours of unused accrued paid sick leave per year unless the employer frontloads the time, in which case, carry over is not required. The Guidance further clarifies that an employer may also offer to pay out an employee’s unused accrued paid sick leave in lieu of carrying over to the following year, but only if an employer and employee agree. Employers that do not frontload paid sick leave may want to consider offering employees a payout option to better manage workforce and staffing levels at the beginning of the following year before paid sick leave accruals grow.

There is likely to be additional forthcoming guidance from the DOL as the amended PSL law goes into effect beginning in January. In addition to carefully reviewing the amended PSL law and the DOL’s guidance, employers should consult competent employment counsel.

This post is also being shared on our Manufacturing Law blog. If you’re interested in getting updates on legal news and perspectives and related business issues that are facing manufacturers and distributors, we invite you to subscribe to the blog.

Simply including a requirement in a contract to add certain parties as additional insureds under a commercial general liability insurance (CGL) policy may not be enough to ensure such coverage is provided in New York. In New York City Hous. Auth. v. Harleysville Worcester Ins. Co., 226 A.D.3d 804 (2024), the New York Supreme Court Appellate Division – Second Department ruled that the language in an insurance endorsement required privity of contract with the insured party subcontractor to obtain additional insured status and denied coverage to others despite a provision in a subcontract requiring such additional insured coverage.

In this case, an owner entered into a contract with a general contractor for construction services. The general contractor entered into a subcontract with a subcontractor. The subcontractor agreed to procure and maintain a CGL policy naming the owner, the general contractor, and another related party as additional insureds thereunder. An employee of the subcontractor was injured on the project and sued the three additional insureds and several other parties. Subcontractor’s insurance company refused to defend and indemnify any party other than the general contractor. All the parties sued by the subcontractor’s employee brought an action against the subcontractor’s insurance company, seeking coverage for defense and indemnification as additional insureds under the subcontractor’s CGL policy.

The subcontractor’s insurance endorsement at issue is provided in the below relevant part:

Who is an insured is amended to include as an insured any person or organization for whom you are performing operations only as specified under a written contract … that requires that such person or organization be added as an additional insured on your policy.

The court interpreted the prepositional phrase “for whom” to require privity of contract between the named insured subcontractor and the party seeking additional insured status. Since the general contractor was the only party who contracted directly with the subcontractor, only the general contractor qualified for additional insured coverage under the terms of the CGL policy. Even though the subcontractor agreed to add other parties as additional insureds in the subcontract, the language in the endorsement precluded all other parties not in privity with the subcontractor from additional insured coverage. The court also ruled that the language in the subcontract incorporating the terms of the prime contract between the owner and general contractor, which required the general contractor to add the owner as an additional insured under its policy, was insufficient to confer additional insured status on the owner with respect to the subcontractor’s policy.

To ensure additional insured coverage in New York, owners and general contractors should obtain and review copies of all subcontractor insurance policies and endorsements before the commencement of work to ensure a prepositional phrase such as “for whom” or “with whom” relating to privity of contract is not included as a condition of additional insured coverage.

The end of the U.S. Department of Transportation’s (USDOT) Disadvantaged Business Enterprise (DBE) program is getting closer. The DBE program presumes women and minority-owned firms are disadvantaged and sets goals for them to be awarded at least 10% of the value in federal contracts. In a well-reasoned and compelling decision, the U.S. District Court for the Eastern District of Kentucky granted a limited preliminary junction against USDOT’s DBE program in the case Mid-America Milling Co., LLC v. U.S. Department of Transportation, et al., No. 3:23-cv-72-GFVT, 2024 WL 4267183 (E.D. Ky Sept. 23, 2024). The Mid-America court found that the race and gender-based rebuttable presumptions used in the DBE program violate the U.S. Constitution’s guarantee of equal protection under the Fourteenth Amendment.

The plaintiffs in Mid-America challenged the use of the DBE presumption when determining whether a person is socially disadvantaged on the grounds that such a program giving preference to certain companies based on race and gender constitutes unconstitutional racial discrimination. The plaintiffs alleged that the DBA program prevents them from competing on government contracts on equal footing with firms owned by women and certain racial minorities and filed suit seeking a declaratory judgment and preliminary and permanent injunctions enjoining the USDOT from applying the DBE’s race and gender-based classifications.  

The court methodically dismantled the government’s arguments against the plaintiffs’ standing to bring the lawsuit as well as its arguments against the requirements necessary to sustain a preliminary junction. The plaintiffs have standing to bring suit because they sufficiently established an injury resulting from the denial of equal treatment, which is fairly traceable to the DBE program’s race- and gender-based presumption. The plaintiffs also established that their injury resulting from the denial of equal treatment is redressable by a favorable decision by the court.

The court examined the requirements for a preliminary injunction and found all were satisfied. The court held that the plaintiffs would likely win on the merits of their constitutional claims. The government failed to prove that the racial classifications in the DBE program were being employed to further the only applicable compelling government interest of remediating past discrimination. The government offered only broad societal discrimination types of evidence, such as disparity studies, statistical disparity evidence, anecdotal evidence, and expert reports— the court found that such evidence is too broad and insufficient to prove past discrimination against the many groups to whom it grants a preference under the DBE program. The government also failed to prove that the DBE program’s race-based rebuttable presumption was narrowly tailored because it only covers some minority groups and lacks a logical endpoint. The government offered similar societal discrimination evidence to support the DBE program’s gender classifications to remedy past discrimination, which the court also rejected because it failed to prove that the government participated in intentional discrimination within the context of USDOT-funded contracts.

The court also found the plaintiffs would suffer irreparable harm if a preliminary injunction was not issued because contracts with DBE goals would continue to be issued, and when they are, the plaintiffs would be at an automatic disadvantage to certain types of competitors. Lastly, the court concluded that the temporary relief sought would not cause substantial harm to others and would serve the public’s interest.  

While this decision is limited to the contracts the plaintiffs bid on in Kentucky and Indiana, its comprehensive analysis of the applicable law might serve as a guideline for similar actions nationwide and ultimately the U.S. Supreme Court.

Dispute resolution provisions that grant one party the unilateral right to choose either litigation or arbitration to resolve disputes are common in the construction industry. The main difference between the two forums is that courts are more likely to strictly enforce contract terms as written as well as the applicable law, while arbitrators make decisions on more equitable considerations, untethered to the contract terms and—to some degree—the law. The party with the sole discretion to select the dispute resolution procedure can select the process most beneficial to its interests based on the nature of the dispute, regardless of who brings the claims. In Atlas Electrical Construction, Inc. v. Flintco, LLC, 550 P.3d 881 (N.M. Ct. App. 2024), the Court of Appeals of New Mexico recently held that an arbitration provision in a subcontract, under which the contractor retained the exclusive right to choose whether disputes arising under the subcontract were litigated in court or arbitrated was unreasonably one-sided, substantively unconscionable, and unenforceable.

The Atlas Electrical case involved two sophisticated entities with equal bargaining strength to negotiate the terms of a subcontract. The parties agreed to a subcontract provision which provided in the relevant part:

In the event [contractor] and [subcontractor] cannot resolve the dispute through direct discussions or mediation … then the dispute shall, at the sole discretion of [contractor], be decided either by submission to (a) arbitration … or (b) litigation …

The subcontractor filed a lawsuit in court, and the contractor moved the court to compel arbitration. The lower court granted the contractor’s motion, and the subcontractor appealed, claiming the arbitration provision was substantively unconscionable and unenforceable. The Court of Appeals analyzed the arbitration provision under the principles of state contract law, which calls for enforcing the terms of a contract unless there is a claim of fraud, unconscionability, or other grossly inequitable conduct.  

On appeal, the contractor conceded that the arbitration provision was facially one-sided but still fair and reasonable and should be enforced. The contractor argued that both parties were sophisticated parties with equal bargaining power, the subcontract price was over $10.7 million, the subcontractor was able to, and did, in fact, negotiate the subcontract terms and failed to make any changes to the arbitration provision—the court rejected this argument. Since the contractor retained the exclusive right to choose whether disputes arising under the subcontract are litigated or arbitrated and the subcontractor retains no right under the subcontract to choose the forum for dispute resolution for any reason whatsoever, the contractor carved out a choice of forum for its preferred claims while also forcing the subcontractor to submit to contractor’s choice of forum for the subcontractor’s preferred claims. The court held that such an arbitration provision is so unreasonably one-sided and substantively unconscionable that it is unenforceable. The court ordered the arbitration provision to be severed from the subcontract and remanded the case to the lower court for further proceedings.

While this decision is limited to New Mexico, contract law analysis is similar in most other states, and the reasoning in this case may resonate with other state courts as well.

On August 6, 2024, Massachusetts Governor Maura Healey signed the Affordable Homes Act (the Act) into law. The Act aims to counter the rising cost of housing in the commonwealth by implementing new policies and providing funding for the construction of affordable housing. New policies include:

  • A requirement that municipalities permit the construction of accessory dwelling units (ADUs) on the same parcel as a primary dwelling.
  • A requirement that municipalities permit the construction of single-family residences on previously unbuildable lots held in common ownership with an adjacent residential lot.
  • The creation of a commercial property conversion program to support the conversion of commercial space into housing or mixed-use developments.

The Act also unlocks over $5.1 billion in new funding for the renovation of public housing, construction of new affordable housing developments, and various sustainable and green housing initiatives.

The Act amends Massachusetts General Law chapter 40A, § 3, to prevent municipalities from requiring zoning variances for the construction or rental of ADUs on parcels zoned for single-family homes and prevents any requirement that ADUs be owner-occupied. Municipalities may still require that ADUs comply with requirements for site-plan review, bulk and height limits, setbacks, and short-term rental bans. Municipalities are permitted to require an additional parking space for ADUs, except if the ADU is located within a half-mile from any commuter rail station, subway station, ferry terminal, or bus station.

The Act also amends Massachusetts General Law, Chapter 40A, § 6, to allow the construction of single-family homes on residential lots that are held in common ownership with an adjoining residential lot. Under prior law, a municipality was permitted to treat adjoining residential lots held in common ownership as a single lot for zoning purposes. As a result, owners of such lots were prevented from building an additional home on the vacant lot, even if the lot would be buildable if not held in common ownership. The Act now permits the construction of homes on these lots if the lot conformed with certain zoning requirements at the time of recording; the lot is not less than 10,000 square feet and has at least 75 feet of frontage, and the lot is in a single-family zoning district. Homes built on these adjoining lots are limited to 1,850 square feet of heated living area with a minimum of three bedrooms. The Act prohibits these homes from being used as seasonal or short-term rentals.

The Act creates an office conversion program that will support the conversion of certain commercial buildings from commercial-use to residential- or mixed-use developments. The new program will allow developers to apply for a “qualified conversion project” certification. Completed qualified conversion projects will then be eligible to apply for a tax credit of up to 10% of the development cost for the project’s residential portion.

The Act authorizes $5.16 billion in new spending for affordable housing initiatives over the next five years. Included in this new funding is $2 billion for capital improvements to the Commonwealth’s public housing; $800 million for the Affordable Housing Trust Fund, which supports the construction and preservation of housing for people with incomes that do not exceed 110% of the area median income; and $275 million for initiatives that accelerate new housing strategies, support transit-oriented housing, and support the creation of sustainable multi-family housing.

The passage of the Act promises to significantly impact affordable housing construction in coming years. Owners, developers, and contractors are encouraged to review the Act to determine how best to take advantage of the new policies and funding made available under it. 

The state of Rhode Island recently filed a lawsuit against 13 companies that provided design, construction, and inspection services over the past ten years (the extent allowed by the applicable statute of limitations) to the Washington Bridge, which carries I-195 between East Providence and Providence. The bridge was abruptly closed in December 2023 following the discovery of alleged fractured steel tie-downs critical to the bridge’s stability and additional deterioration in cantilever beams throughout the bridge. Before the closure, approximately 90,000 vehicles per day traveled over the bridge.

The complaint alleges that the defendants, the majority of which are experienced, industry-leading firms in their respective fields, were negligent and breached their respective contracts with the State. The State contends that every company that worked on the bridge over the past ten years missed the serious structural conditions alleged. The lawsuit also claims that the State has suffered millions of dollars of damages since the bridge was closed and seeks indemnity and contribution from all defendants to the extent that the State may be liable to third parties in the future.

The State does not acknowledge any responsibility for any of the issues with the Washington Bridge despite having approved the original “one of a kind” design and first learning of potential problems with such design as far back as 1992. The Boston Globe reported that the State also hopes to avoid disclosing information regarding its responsibilities for the bridge, including a recently completed forensic analysis of the cause of the bridge failure. However, based on the allegations in the complaint, the lawsuit will likely open discovery of all Rhode Island Department of Transportation’s records related to the Washington Bridge back to its initial design in the mid-1960s. Such documents could undermine the broad allegations in the State’s complaint for the defendants who choose to fight rather than settle quickly.

The bridge will be demolished soon, and the recently issued initial solicitation to design and construct a new bridge has received no bids. This should come as no surprise, given the highly publicized and political nature of the lawsuit and the broad accusations against all the companies connected to the bridge in the past. Whatever the State hopes to recover in this lawsuit may be offset by the risk priced into the new project… if anyone ever bids on it.    

N.Y. Labor Law § 241(6) requires owners and contractors to provide reasonable and adequate protection and safety to persons employed at or lawfully frequenting a construction site. If a worker is injured on a construction site and establishes a violation of a specific and applicable Industrial Code regulation, both the owner and contractor will be held vicariously liable for the worker’s injury, without regard to their fault and even in the absence of control or supervision of the worksite. The Court of Appeals of New York recently addressed the broad scope of the Labor Law in the context of slipping hazards.

In Bazdaric v. Almah Partners, LLC, 41 N.Y.3d 310 (2024), the plaintiff, an injured painter, slipped and fell on a plastic covering placed over an escalator in an area he was assigned to paint. The plaintiff claimed that the plastic covering was a foreign substance for purposes of Industrial Code 12 NYCRR 23-1.7(d) because it was not part of the escalator. Industrial Code 12 NYCRR 23-1.7(d) states:

Slipping hazards. Employers shall not suffer or permit any employee to use a floor, passageway, walkway, scaffold, platform or other elevated working surface which is in a slippery condition. Ice, snow, water, grease and any other foreign substance which may cause slippery footing shall be removed, sanded or covered to provide safe footing.

The Court found that the plastic covering was a “foreign substance” under 12 NYCRR 23-1.7(d) after examining its relation to the work area and its uniform properties. The plastic covering was a “foreign substance” because it “was not a component of the escalator and was not necessary to the escalator’s functionality.” The plastic covering also had properties common to “ice, snow, water and grease,” materials that are slippery when in contact with an area where someone walks, seeks passage, or stands, and when the substance is present, would make it difficult if not impossible to use the work area safely.

The Court considered and rejected the “integral to the work” defense, which applies only when the dangerous condition is inherent to the task at hand. This defense applies to work assignments which, by their nature, are dangerous but still permissible, where the particular commands of the Industrial Code may not apply if they would make it impossible to conduct the work. It does not apply when a party’s negligence creates an avoidable danger without obstructing the work or imperiling the worker. In this case, the use of some covering was integral to the paint work, but the use of the specific plastic covering was not. The plastic covering created the slippery condition, which was avoidable without obstructing the work or endangering the worker because other types of coverings were available.

Notably, the concurring opinion identified a potential ambiguity in the Court’s holding. The majority’s opinion focused significant attention on whether the plastic covering was a foreign substance under 12 NYCRR 23-1.7(d) and determined such a foreign substance includes “any substance not part of the escalator,” rather than more narrowly considering it to be a substance that “shares the same qualities that make ‘ice, snow, water and grease’ hazardous when introduced into a qualifying work area.”

Below is an excerpt of an article published in ENR (Engineering News-Record) on August 7, 2024.

“The Massachusetts Legislature passed the state’s Prompt Pay Act 14 years ago to improve the downstream flow of money on most large-scale private construction projects. While the act established detailed protocols for administering applications for payment and other important construction phase processes, several questions about its interpretation and impact remained unanswered.

Over the years, I watched as a significant portion of the Massachusetts design and construction community either ignored the law’s exacting requirements or were unaware of their applicability. The first indication of how the act would be interpreted came in 2022, when the state appeals court decided Tocci Building Corp. v. IRIV Partners LLC. In that case, the court strictly construed the act. It held that an owner (and its agent) who failed to promptly advise the project’s general contractor of specific factual and legal reasons why it was withholding payment, coupled with a failure to certify that funds were being withheld in good faith, violated the law—making the contractor liable for the unpaid funds.

But Tocci left unanswered the question of whether a payor who innocently fails to comply with the act also loses its right to later argue that the payee is not entitled to the funds it seeks because, among other reasons, it performed defective work. These questions are also important to design professionals who, while performing construction phase services for an owner, may fail to strictly comply with the act’s requirements.

Massachusetts’ highest tribunal, the Supreme Judicial Court, answered that question this past June in Business Interiors Floor Covering Business Trust v. Graycor Construction Co. Inc., et.al.”

The Court’s analysis credited the amicus brief I wrote on behalf of my client and the act’s original author, the Associated Subcontractors of Massachusetts, Inc. Read the article.

A common question from clients, when a dispute arises on a construction project, is whether they can recover their attorney’s fees from the other side if they pursue a case and win. More often than not, such fees are not recoverable. As a general rule (commonly known as the “American Rule”), each party to a dispute must bear their own attorney’s fees unless there is some statutory provision or contractual agreement between the parties allowing otherwise. Since most construction disputes involve claims for breach of contract and/or negligence, no realistic statutory provision often allows for attorney’s fees. Many construction contracts do not typically provide a prevailing party the right to collect attorney’s fees from the other side. However, even if the American Rule applies, there may be another path to recovering attorney’s fees if the parties agree to arbitrate their dispute under the American Arbitration Association (AAA) rules.

The AAA Construction Industry Arbitration Rules allow parties another opportunity to put attorney’s fees back on the table when faced with the American Rule.  Rule R-49 Scope of Award, subsection (d) allows an Arbitrator to include “an award of attorneys’ fees if all parties have requested such an award or it is authorized by law or their arbitration agreement.” Attorney’s fees are possible if all parties request them, even when such an award is not authorized by law or in the underlying construction agreement. It’s unclear whether Rule R-49 requires the parties to formally agree to allow the arbitrator to award attorney’s fees to the winning party or if both parties simply need to request attorney’s fees in their respective filings. Rule R-49 Scope of Award, subsection (c) also authorizes an Arbitrator to assess administrative fees, arbitration expenses, and the arbitrator’s compensation against the parties in such amounts as the arbitrator determines is appropriate. If the parties in a construction dispute have agreed to arbitrate under AAA rules, the possibility of recovering attorney’s fees and other costs under the AAA rules may be enough to persuade a client wary of incurring potentially large legal costs into pursuing a claim in the first place.