Category: News Line

On April 22, the U.S. Court of Appeals for the Sixth Circuit issued a clarified ruling blocking the U.S. Environmental Protection Agency and Army Corps of Engineers from enforcing a final rule published by the agencies on Jan. 18 that revises the definition of Waters of the United States until at least May 10. The ruling was the result of a lawsuit brought by Kentucky’s attorney general and private industry groups.

The final rule, which defines the scope of waters subject to Clean Water Act regulation, repealed the Trump administration’s Navigable Waters Protection Rule, which ABC supported, and codified a definition that reflects the pre-2015 regulatory regime that the agencies are currently implementing. Following prior injunctions issued by other courts, enforcement of the rule is now blocked in 27 states.

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Beginning April 1, 2023, states that maintained continuous Medicaid enrollment during the COVID-19 pandemic may start terminating coverage for individuals who are no longer eligible. Employers will likely see an increase in midyear enrollment requests as individuals lose eligibility for Medicaid or Children’s Health Insurance Program coverage.

To receive additional federal funding, many states maintained continuous enrollment for individuals enrolled in Medicaid during the COVID-19 pandemic, despite any changes in eligibility status. Medicaid’s continuous enrollment requirement ended on March 31, 2023. While some individuals who lose Medicaid or CHIP eligibility will enroll in coverage through a health insurance marketplace, federal regulators estimate that 5 million people will seek coverage under employer-sponsored health plans.

Privacy laws require group health plans to provide special enrollment opportunities in certain situations, including when employees or their dependents lose eligibility for Medicaid or CHIP coverage. Employees normally have 60 days to request special enrollment, but this deadline was extended during the COVID-19 national emergency. Read more from ABC Insurance Trust and learn what actions employers should take.

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On April 19, ABC submitted comments in opposition to the Federal Trade Commission’s unprecedented proposal to ban all noncompete agreements nationwide, a radical departure from hundreds of years of legal precedent. Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts around the country that are beneficial for both businesses and employees.

In the comments, ABC argued that the FTC lacks the statutory or constitutional authority to issue this rulemaking; noncompete agreements are appropriately regulated at the state level; the proposed rule violates the Administrative Procedure Act; and a blanket ban on noncompete agreements will harm construction employers and employees.

The comment letter includes survey responses from ABC members who explained the benefits of noncompete agreements and how the proposed ban would have a severe adverse impact on their companies as well as their employees.

ABC also joined the U.S. Chamber of Commerce and 280 business groups in submitting comments urging the FTC to rescind the proposed rule.

Background:

On Jan. 5, 2023, the FTC issued a proposed rule that would ban all noncompete agreements with limited exceptions. According to the FTC, the proposed rule would make it illegal for an employer to:

• Enter into or attempt to enter into a noncompete with a worker;
• Maintain a noncompete with a worker; or
• Represent to a worker, under certain circumstances, that the worker is subject to a noncompete.

On Feb. 2, ABC hosted a webinar to highlight how the proposed rule will affect members and why the FTC’s action is constitutionally suspect and open to a strong legal challenge.  

On Feb. 16, the FTC hosted a public forum examining the FTC’s proposed rule to prohibit employers from imposing noncompetes on their workers. The FTC heard from a series of speakers who have been subjected to noncompete restrictions, as well as business owners who have experience with noncompetes.

On Feb. 28, ABC joined a coalition letter to Congress denouncing the rule and encouraging the body to use its oversight and appropriations authority to closely examine the proposed rule.

Continue to monitor Newsline for any further updates on the FTC’s proposed rule.

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On April 12, a federal judge in the U.S. District Court for the District of North Dakota issued a ruling blocking the U.S. Environmental Protection Agency and Army Corps of Engineers from enforcing a final rule published by the agencies on Jan. 18 that revises the definition of Waters of the United States. The ruling was the result of a lawsuit brought by 24 state attorneys general and rejected a request to block enforcement nationwide.

The April 12 preliminary injunction applies to Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia and Wyoming. Enforcement in Texas and Idaho was blocked under a previous ruling in a separate lawsuit.

The final rule, which defines the scope of waters subject to Clean Water Act regulation, repealed the Trump administration’s Navigable Waters Protection Rule, which ABC supported, and codified a definition that reflects the pre-2015 regulatory regime that the agencies are currently implementing. ABC joined a coalition opposing the rule, submitting comments outlining how it fails to provide unambiguous water quality protections that provide clarity for contractors seeking to safeguard the environment and comply with federal regulations.

ABC has also supported H.J. Res 27, a Congressional Review Act resolution that would have overturned the final rule, which passed the U.S. House of Representatives and U.S. Senate with bipartisan support before being vetoed by President Joe Biden on April 6.

On April 18, the House held a vote on overriding the veto. ABC issued an action alert asking members to urge their member of Congress to vote in support. The veto override again received bipartisan support in a 227-196 vote but failed to meet the two-thirds threshold needed to pass.

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On April 4, the Appellate Division of the New Jersey Superior Court ruled that a commission authorized by New Jersey and Pennsylvania law to build and maintain Delaware River bridges lacked the authority to require controversial project labor agreements.

At issue were a contractor’s allegations that the Delaware Joint Toll Bridge Commission violated its fiduciary and legal duties when it required a PLA that excluded from consideration the lowest responsible bid for a bridge improvement project. The court found the PLA mandated by the commission was authorized neither explicitly in Pennsylvania statute nor implicitly in Pennsylvania competitive bidding law and public policy. While the court explicitly declined to “condemn the use of PLAs,” its ruling was partially informed by the commission’s failure to garner competitive bids. The PLA resulted in just one bid at $69 million, or roughly 20% more than the estimated project cost.

“This case is another illustration that government-mandated PLAs needlessly increase costs, reduce competition from qualified contractors and even exclude certain union-signatory contractors and union labor from competing for and building critical infrastructure projects,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Because the project was built with an illegal PLA, delayed justice ultimately wasted $70 million of taxpayers’ money. This fiasco serves as an expensive reminder that the benefits of fair and open competition can help deliver the best infrastructure projects at the best price to American people.” 

In 2016, the Delaware Joint Toll Bridge Commission informed potential bidders for the estimated $260 million Scudder Falls Bridge improvement project of a PLA requiring contractors to hire 75% of all craft labor from specific unions signatory to the PLA. George Harms Construction, a New Jersey heavy construction contractor, threatened an injunction against the procurement unless the commission amended the PLA to include an additional union that was party to an existing collective bargaining agreement with the company. The commission refused and filed for a declaration that the unamended PLA was compatible with its fiduciary and legal duties.

Harms responded that the PLA prevented its submission of a bid $71 million less than the lone and successful bid, and therefore violated New Jersey and Pennsylvania laws requiring the commission to ensure competitive bidding and “prudent use of toll payer monies.” While New Jersey statute explicitly authorizes government-mandated PLAs, Pennsylvania statute does not, and Pennsylvania case law permits government-mandated  PLAs only in the event of “extraordinary circumstances.”

A district court found that the commission retained the authority to require a PLA in the absence of consistency in New Jersey and Pennsylvania’s legal treatment of PLAs and found the PLA not unrelated to the commission’s interests in timely completion.

The appellate court disagreed, ruling that the absence of consistency required the commission’s consent to exclusive jurisdiction under New Jersey law as a precedent to the PLA, and that the commission had not so consented. The appellate court clarified that, although the commission’s failure to garner competitive bids was not “basis for invalidating the PLA, … the commission must be mindful that its authorized purpose is to benefit the people of New Jersey and Pennsylvania.”

The ruling comes as the construction industry awaits a final rule implementing President Joe Biden’s Executive Order 14063, which requires PLAs on federal construction projects of $35 million or more. The Biden administration is also pushing state and local governments applying for more than $250 billion in federal infrastructure grants to require PLAs in order to enhance their ability to receive federal money. Research has found government-mandated PLAs increase infrastructure project costs by 12% to 20%. This will also exacerbate the construction industry’s skilled labor shortage of more than half a million people by excluding the 88% of the construction industry that chooses not to join a union­—in addition to some construction workers who are members of labor unions not favored in a PLA—and undermine taxpayer investments in America’s infrastructure and clean energy projects.

A total of 25 states have enacted laws that restrict the use of government-mandated PLAs, while less than a dozen states, including New Jersey, have enacted laws encouraging the use of  government-mandated PLAs on public works projects in certain circumstances.

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By Mary Lou Jay for Building Washington Magazine

For over 30 years, ABC has helped contractors protect the physical safety of their employees on the jobsite through the STEP Safety Management System. Now the association is expanding on STEP with the introduction of the Total Human Health Initiative, or THHI. THHI “encompasses actions, initiatives and policies that emphasize the health, well-being and livelihoods of workers … [it incorporates] a whole-person approach to engage a person’s body, mind, heart and soul.”

THHI grew out of the construction industry’s recognition of the high rate of suicide among its workers. “Construction workers are five times more likely to die by suicide than they are from any work-related accident,” said Frank Trujillo, vice president of risk management at Miller & Long Co., Inc. and chair of ABC’s national Health and Safety Committee.

While safety professionals have always been focused on preventing people from getting hurt at work, they are now paying more attention to the other types of problems that workers may be dealing with at home and on the job. They understand that when workers do not get the necessary help with these issues, the results can be tragic. “Many industry professionals either know someone who died by suicide or had to get help to prevent that from happening,” said Trujillo.

ABC’s Health and Safety Committee appointed a subcommittee dedicated specifically to addressing suicide prevention. But as the subcommittee members began their work, they realized that they needed to broaden their assignment and address total human health. “The subcommittee members went from an awareness of suicide to a deep dive into mental health to a focus on overall human wellness. It was a cascading issue,” Trujillo said.

Toolkit Provides Roadmap to Wellness

The people who developed THHI included construction industry and safety professionals and mental health professionals. The committee members referenced resources like the National Institutes of Health’s Emotional Wellness Toolkit, and information from the Substance Abuse and Mental Health Services Administration and the National Alliance on Mental Illness.

The results of their efforts can be found on ABC’s Total Human Health Initiative (abc.org/Safety/Total-Human-Health) resources page. The page has links to materials that companies can use during Suicide Prevention Month in September, such as posters, social medial toolkits and toolbox talks. The page also provides links to articles and resources that companies can share with their workers.

In the Total Human Health Resources for Leadership section, companies will find a comprehensive toolkit developed specifically for this program as well as an assessment they can use to determine where they are on the road to promoting total human health.

The toolkit covers the four categories of THHI:

• Heart, which includes emotional and social wellness;
• Body, which covers physical wellness;
• Soul, which relates to spiritual and community wellness; and
• Mind, which includes intellectual, occupational, mental and environmental wellness.

The toolkit contains suggested activities that companies can use to encourage conversations about each area with small groups of employees or with the entire company. It provides detailed, step-by-step instructions for toolbox talks, workshops and helping employees create their own personal wellness toolkits.

Trujillo said that, while the toolkit is long, there is no fluff in it. “The toolkit really drills down on each one of those elements and provides actionable products that companies can immediately take out in the field and implement with their employees,” he said.

The Total Human Health Assessment provides a way for contractors to measure how far they have progressed (or need to progress) in each of THHI’s four categories. It lists questions that companies should ask themselves, and provides four scoring categories: “Not on our radar,” “Planning phase,” Under construction,” and “Fully integrated.” It also provides specific steps that companies can take to improve their performance and move up the scale.

Integral to STEP

ABC has introduced THHI in its STEP safety self-assessment this year so that members can familiarize themselves with the program and evaluate where they need to improve. ABC will not count THHI scores toward a rating of Diamond, Platinum, Gold, Bronze or Participant this year, but starting in 2024 the association will count them in the STEP scoring.

Trujillo believes that the industry is ready for THHI. Company leaders often tell him about people they have lost or people they did not realize had problems. Although discussions about these human health concepts may be uncomfortable for some construction workers at first, he believes companies will find ways to bring them into the workplace.

“I am amazed every year at how creative they are at getting these kinds of things done. The major lift we have from the perspective of ABC and the industry as a whole is to bring total human health front and center and make it a must-have rather than a nice-to-have,” he said.

Trujillo also noted that the comprehensive resources developed by the THH Subcommittee has sparked a conversation about improving the other components of the STEP program. “Our goal is to expand the rest of STEP to have these equally useful guides that can move people along in other safety categories,” he said.

Encouraging Implementation

Members of ABC of Metro Washington may find some assistance with THHI implementation at the monthly meetings of the chapter’s Safety Professional Peer Group. The group, which is open to everyone, meets to discuss key components of the STEP program, which will now include THHI. Each meeting focuses on a different topic, but there is also open networking and discussion time where attendees can ask questions and share resources and information about THHI and other health and safety issues.

One possible resource for employees could be a list of mental health providers that accept their company’s health insurance. (Miller & Long is already doing this.) Having this information readily available can reduce stress and save time for someone who is need of assistance.

ABC’s traveling Safety Academies will also be covering THHI, and it is likely to be a topic at ABC National and chapter meetings this year. “It will take a little bit of time, but THHI is going to be a mainstream topic of discussion,” Trujillo said

“I think this is the issue of our time and of my career,” he added. “Safety has always been something that we have focused on and we have done great things. But this side of the house has been neglected. An industry that is trying to find its future in the labor market must think about how we are going to attract folks. You cannot get there without addressing these issues, without letting people know that you care about them.”

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On April 4, the U.S. Internal Revenue Service released additional guidance on the Inflation Reduction Act’s energy communities program bonus tax credits, which are in effect in advance of forthcoming proposed regulations that will implement the credits for all taxable years ending after April 4, 2023.

The ABC-opposed Inflation Reduction Act was signed into law on Aug. 16, 2022, and provides over $270 billion in tax credits for the construction of solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and other clean energy projects.

The April 4 IRS guidance specific to the energy communities program bonus tax credit states that taxpayers that meet the requirements may have the clean energy Investment Tax Credit or Production Tax Credit increased by a maximum of 10%. For the Production Tax Credit, prevailing wage, apprenticeship and other requirements must be met to receive the full 10% bonus, otherwise the increase will be limited to 2%. To be eligible, a project must be sited in a location that falls under one of the following categories:

• A brownfield site, as defined by the Comprehensive Environmental Response, Compensation and Liability Act
• A Metropolitan Statistical Area or Non-Metropolitan Statistical Area that has or previously had .17% or greater employment in fossil fuel industries or 25% or greater local tax revenues from fossil fuel industries, where the unemployment rate is now at or above the prior year’s national average
• Census tracts in which a coal mine closed after 1999 or a coal-fired electric plant closed after 2009 and adjoining census tracts

The guidance states that the U.S Department of Treasury and the IRS intend to provide a listing of MSAs and non-MSAs that qualify as energy communities under the second category once 2022 unemployment data becomes available. Treasury has also provided a mapping tool for identifying energy communities, which will be updated to reflect this data in May.

Taxpayers may also receive another 10% tax credit increase for meeting domestic content requirements. All steel and iron on a project must be 100% produced in the United States to meet this requirement. Additionally, between 40% to 55%, depending on project type and the year construction begins, of the total cost of other components and subcomponents used on the project must be attributable to components that are mined, produced or manufactured in the United States in order to receive this bonus. The IRS previously requested comments on these requirements and additional guidance on these requirements is expected soon. ABC provided feedback regarding supply chain issues and cost increases that may be caused by these domestic content requirements in comments to Treasury and the IRS.

On March 22, IRS Assistant Secretary for Tax Policy Lily Batchelder provided a status update on IRS guidance and regulations for a number of tax credit programs contained in the IRA, such as the clean vehicle credit, the energy communities program, the domestic content program, direct pay and transferability and the prevailing wage and apprenticeship requirements needed to receive full credits.  

ABC also weighed in extensively in the previously mentioned comments on prevailing wage and government-registered apprenticeship requirements that must be met to unlock bonus tax credits five times more than the baseline 6% Production Tax Credit and Investment Tax Credits. Treasury and the IRS issued initial guidance regarding these requirements on Nov. 30, 2022, and they are now in effect for projects that began on or after Jan. 30, 2023.

For more information and resources on compliance with the IRA’s requirements, please visit ABC’s new website, abc.org/ira. If you have questions that are not answered on the website or in Treasury/IRS guidance, ABC is here to help. Please email [email protected] and ABC subject matter experts will work to answer your question or reach out to Treasury/IRA for clarification.

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The U.S. Department of Labor’s Wage and Hour Division is hosting the webinar, “Best Practices to Prevent and Address Workplace Retaliation” on Friday, April 14, from 1 to 2 p.m. ET for employers and employer groups. This webinar will highlight best practices as informed by the enforcement and compliance assistance efforts of five federal agencies covering a wide range of workplace laws.

Webinar presenters include:

• Jennifer A. Abruzzo, General Counsel for the National Labor Relations Board
• Charlotte A. Burrows, Chair of the U.S. Equal Employment Opportunity Commission
• Jessica Looman, Principal Deputy Administrator for the Wage and Hour Division
• Seema Nanda, Solicitor of Labor for the U.S. Department of Labor
• Douglas L. Parker, Assistant Secretary of Labor for the Occupational Safety and Health Administration

Interested parties can register for the free webinar here.

Additional questions can be directed to Bonnie Worstell at [email protected].

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On March 30, the U.S. House of Representatives passed the ABC-supported H.R. 1, the Lower Energy Costs Act, in a bipartisan 225-204 vote, with four Democrats supporting and only one Republican, Rep. Brian Fitzpatrick, R-Pa., opposing the bill.

Ahead of the vote, ABC sent a key vote letter to the House detailing ABC’s support for the bill.

H.R. 1 contains several permitting reform provisions, including the ABC-supported BUILDER Act, all of which will go a long way toward eliminating unnecessary delays that cause budget overruns in construction. The BUILDER Act codifies key elements of the One Federal Decision Framework, including development by the lead agency of a joint schedule; procedures to elevate delays or disputes; preparation of a single environmental impact statement; and joint Record of Decision—all to the extent practicable, set, reasonable time limits are imposed for environmental reviews and establish reasonable page limits for environmental documents.

H.R. 1 also includes important threshold considerations for agencies assessing whether the National Environmental Policy Act applies to a proposed activity or is otherwise fulfilled through another statute. The legislation also includes key reforms to the NEPA judicial process, requiring claimants to have participated meaningfully in the NEPA process before filing suit and providing a reasonable timeline of 120 days to file those lawsuits.

Further, the Water Quality Certification and Energy Project Improvement Act is included in H.R. 1, which would streamline the permitting process under Section 401 of the Clean Water Act and clarify Section 401’s focus on water quality. This provision would codify ABC-supported reforms to the 401 process to ensure that states do not deny certification to projects for reasons outside of the section’s scope.

Additionally, H.R. 1 focuses on expanding American energy production potential by repealing certain provisions of the Inflation Reduction Act and increasing domestic energy production.

The bill now heads to the U.S. Senate, where it is unlikely to be considered as a whole, as President Joe Biden has issued a veto threat via a Statement of Administration policy opposing H.R. 1. However, as leaders in the Senate continue to discuss several permitting reform solutions, H.R. 1 addresses many of the key negotiation points on the issue from the House majority.   
 

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On March 29, the U.S. Senate passed the ABC-supported H.J. Res. 27, the Waters of the United States Congressional Review Act Resolution, in a 53-43 vote with the support of all Senate Republicans and five Democrats, Sens. Rosen, Nev., Cortez Masto, Nev., Manchin, W.Va., Tester, Mont., and Sinema, Ariz. Four senators did not vote. On March 9, the U.S. House of Representatives advanced the bill to the Senate in bipartisan fashion, as nine Democrats joined Republicans to pass the resolution 227-198.

H.J. Res. 27 would overturn the Biden administration’s flawed, burdensome and overreaching WOTUS rule that will result in sweeping changes to the federal government’s authority to regulate what is considered a navigable water, with enormous impacts on small businesses, developers and contractors. 

President Joe Biden has issued a veto threat against the resolution via a Statement of Administration Policy opposing the resolution.

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