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ABC applauded a decision by the U.S. District Court for the Northern District of Texas granting a nationwide preliminary injunction that blocks some provisions in the U.S. Department of Labor’s final rule expanding the Davis-Bacon Act.

Associated General Contractors of America’s lawsuit asserted that the Biden administration lacks the legal authority to expand the law to cover manufacturing facilities miles away from projects and delivery truck drivers spending any amount of time on a jobsite, or to retroactively impose the measure on already-executed contracts, among other things. The court granted AGC’s motion for a nationwide preliminary injunction, temporarily blocking the AGC-challenged provisions.

“The preliminary injunction issued in response to AGC’s federal lawsuit is a victory for the construction industry and the rule of law. It strikes down the Biden administration’s effort to do an end-run around Congress via regulatory action that benefits special interests,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs.

“ABC’s pending federal lawsuit, filed in East Texas, targets other provisions in the DOL’s extreme overhaul of more than 50 Davis-Bacon Act regulations that undermine commonsense reforms put in place by the Reagan administration. We are hopeful ABC’s lawsuit will also prevail over the Biden administration’s regulatory overreach,” said Brubeck.

On Aug. 8, 2023, the U.S. Department of Labor released a final rule, Updating Davis-Bacon and Related Act Regulations, which makes drastic revisions to the Davis-Bacon Act and Related Acts regulations that apply to federal and federally assisted construction projects funded by taxpayers.

The DOL’s final rule mostly disregards the feedback of ABC contractors, construction industry stakeholders, and thousands of small businesses urging the withdrawal of this unnecessary, costly and burdensome regulation.

On Nov. 7, 2023, ABC and its Southeast Texas chapter filed a complaint in the U.S. District Court for the Eastern District of Texas, challenging the controversial final rule.

Learn more at abc.org/davisbacon.

Associated Builders and Contractors’ 2024 Workforce Development Survey found that its contractors invested $1.6 billion to provide craft, leadership and health and safety education to more than 1.3 million course attendees nationwide in 2023, up from $1.5 billion in 2022 and on track with $1.6 billion in 2021.

Other key findings include:

  • Safety education accounts for the greatest share of total workforce investment at 59%, which has remained stable since 2022.
  • ABC contractors invested an average of 7.5% of payroll on workforce development in 2023, slightly down from 8% in 2022.
  • Trade and specialty contractors continued to increase their share of the total workforce development investment, which grew to 50% in 2023 from 42% in 2022.
  • 58% of respondents reported a labor shortage that is severe or very severe, citing an exodus of baby boomers as the top contributor.
  • 81% of respondents who utilize virtual or augmented reality used it for safety education.

“ABC member contractors not only build and rebuild structures with excellence, but they also help build lifelong, durable, transferable skill sets for their employees by investing billions to cultivate their career progression in commercial and industrial construction,” said Greg Sizemore, ABC’s vice president of health, safety, environment and workforce development. “This investment is in response to the need for more than half a million additional construction workers in 2024 alone. Workforce development is part of the culture of ABC member contractors, which continue to choose flexible, competency-based and market-driven methods to upskill their workforces. Construction is among the few industries where an individual can become an apprentice, earn a paycheck while learning the skills needed for their chosen craft and receive a portable, industry-recognized credential that will further their career.”

The annual workforce development survey quantifies the scope of ABC members’ education and upskilling initiatives to advance their employees’ careers in commercial and industrial construction to build the places where we gather, live, work, learn and heal.

ABC’s all-of-the-above approach to upskilling has produced a network of more than 800 apprenticeship, craft, health and safety and management education programs—including more than 450 government-registered apprenticeship programs across 20 different occupations—in order to develop a safe, skilled and productive workforce. ABC chapters also have 328 entry-point programs in place nationally to welcome all to begin a career in construction. Members contribute about $500,000 annually to ABC’s Trimmer Construction Education Fund to support the development of a skilled, safe and sustainable workforce through grants awarded to its chapters.

Industry consulting firm FMI conducted the 2024 Workforce Development Survey from Jan. 4 to May 20, 2024. Aggregated data was derived by calculating the average amount spent on education by each respondent and multiplying that by the total number of ABC contractor members.

The construction industry added 21,000 jobs on net in May, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data. On a year-over-year basis, industry employment has increased by 251,000 jobs, an increase of 3.1%.

Nonresidential construction employment increased by 17,100 positions on net in May, with growth registered in all three major subcategories. Nonresidential specialty trade added the most jobs, with employment increasing by 13,000 positions. Nonresidential building and heavy and civil engineering added 3,000 and 1,100 jobs, respectively.

The construction unemployment rate fell to 3.9% in May. Unemployment across all industries rose from 3.9% in April to 4.0% last month.

“Every monthly employment report is important,” said ABC Chief Economist Anirban Basu. “But this year’s reports are scrutinized carefully for several reasons, including upcoming federal elections. Economists are asking whether indications of softening in certain parts of the economy might cause deterioration in the overall labor market and whether the virtuous cycle of consumer spending and job growth will persist. May’s report indicates that we remain in that virtuous cycle.

“Despite perpetual fears of recession and the dislocating impacts of high borrowing costs, the U.S. nonresidential construction industry is adding jobs rapidly and will continue to, according to ABC’s Contractor Confidence Index,” said Basu. “While many would point to public infrastructure outlays as an obvious source of strength, this report indicates job growth among many industry segments. The rapid transformation of the U.S. economy continues to more than offset the negative impacts of elevated project financing costs.

“As always, the news was not purely positive,” said Basu. “Wage pressures picked up in May, likely quashing hopes for a Federal Reserve rate cut in July. While the establishment survey indicated that the nation added 272,000 jobs in May on a seasonally adjusted basis, blowing through consensus expectations, the household survey indicated that the nation’s unemployment rate increased despite a shrinking U.S.  labor force. What that means is that the headline job growth number emerging from the establishment survey may be overstating U.S. economic strength while also delaying the Federal Reserve’s response to potentially emerging economic weakness.”

Associated Builders and Contractors reported that its Construction Backlog Indicator fell to 8.3 months in May, according to an ABC member survey conducted May 20 to June 4. The reading is down 0.6 months from May 2023.

View the full Construction Backlog Indicator and Construction Confidence Index data series.

Backlog declined on a monthly basis for every company size except those contractors with greater than $100 million in annual revenues. On an annual basis, backlog is down for contractors of all sizes.

ABC’s Construction Confidence Index readings for profit margins and staffing levels fell slightly in May, while the reading for sales improved. All three readings remain above the threshold of 50, indicating expectations for growth over the next six months.

“Over a year has passed since the Federal Reserve raised the target range of the federal funds rate above 5%," said ABC Chief Economist Anirban Basu. "Despite widespread expectations that rates will remain elevated through at least the end of the year, contractors remain confident about the future, with a majority of contractors expecting their sales and staffing levels to expand over the next six months.

“Although backlog has been lower in 2024 than it was during 2023, it has also been stable,” said Basu. “While significant spending activity in manufacturing and infrastructure-related segments has kept contractors busy, input cost escalation has reemerged in recent months. As a result, contractor confidence regarding profit margins has fallen to the lowest level since November 2023.”

by Brian Lynch, Esq., Rudolph Friedmann LLP

On April 23, 2024, the Federal Trade Commission (the “FTC”) approved a new rule prohibiting employment related non-compete clauses. FTC Commissioners voted 3-2 along party lines to approve the new rule. The rule will be effective 120 days after publication in the Federal Register, and employees and employers should expect the rule to become effective on approximately September 1, 2024.

What Is Covered by the New Rule?

The new rule bans non-compete agreements or clauses for all workers going forward after the rule’s effective date. The rule also invalidates existing non-compete agreements or clauses made prior to the rule’s effective date. In other words, current agreements will no longer be enforceable.

The rule is applicable to any clause between an employer and employee that (i) prohibits a worker from, or (ii) penalizes a worker for, or (iii) functions to prevent a worker from seeking or accepting another job after the conclusion of their employment. Items (i) or (ii) can be read as a straightforward ban on clauses that prohibit an employee’s ability to accept employment with a competitor (or another employer). Item (iii) could, arguably, expand the concept of non-compete clauses to include non-solicitation clauses as well. Should a non-solicit clause be construed to functionally prevent a worker from obtaining work, the non-solicit clause could also be unenforceable under the new rule.

What Is Not Covered by the New Rule?

There are certain types of non-compete agreements that will not fall under the rule. Any existing non-compete for “Senior Executives” will still be enforceable. The FTC defines Senior Executives as any employee earning $151,164 or more annually and has a policy making position. This exemption for Senior Executives is not available to new non-compete clauses entered into after the rule’s effective date. Non-compete clauses that are related to the sale of a business are also outside of the scope of the rule and are not banned. Additionally, the FTC has enacted the new rule under Section 5 of the FTC Act, which does not apply to non-profit organizations and as such the rule cannot apply to agreements entered into with a non-profit. 

Alternatives to Non-Compete Clauses

In the FTC’s corresponding press release announcing the rule, it pointed to alternatives to non-compete agreements or clauses. The FTC noted that an estimated 95% of workers subject to a non-compete agreement are also subject to non-disclosure agreements that protect the employer’s confidential and proprietary information. Although the new rule did not include an exception if so called “Garden Leave” (compensation paid in exchange for the non-compete) is provided to a former employee, the FTC does note in the rule “that an agreement whereby the worker is still employed and receiving the same total annual compensation and benefits on a pro rata basis would not be a non-compete clause under the [the rule’s] definition, because such an agreement is not a post-employment restriction. Instead, the worker continues to be employed, even though the worker’s job duties or access to colleagues or the workplace may be significantly or entirely curtailed.”

Challenge to the Rule

The United States Chamber of Commerce (the “Chamber of Commerce”) immediately condemned the new rule as “undermining well-established state laws that have governed the use of non-compete agreements.” The Chamber of Commerce has taken the position that the FTC is acting outside of its constitutional and statutory authority by issuing the new rule. The Chamber of Commerce has filed a complaint against the FTC for declaratory and injunctive relief in the United States District Court for the Eastern District of Texas.

New Developments  

Rudolph Friedmann LLP will provide further information on the FTC’s new rule as it becomes available. Should you have any questions on the rule’s impact on your company or your employment, please contact the attorneys at Rudolph Friedmann LLP.

On May 21, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit in the U.S. District Court for the Western District of Texas, Waco Division against the U.S. Department of Labor’s Occupational Safety and Health Administration’s Worker Walkaround Representative Designation Process final ruleRead the news release announcing the lawsuit.

Effective on May 31, the final rule will allow employees to choose a third-party representative, such as an outside union representative or community organizer, to accompany an OSHA safety inspector during site inspections, regardless of whether the workplace is unionized or not.

Now, construction employees and employers could face serious safety concerns because the final rule has the potential to allow anyone on a jobsite. There simply is no business case for this final rule and no benefit during a compliance inspection.

By allowing outside union agents access to nonunion employers’ private property, OSHA is injecting itself into labor-management disputes and casting doubt on its status as a neutral enforcer of the law. This final rule negatively impacts the rights of employers while simultaneously ignoring the rights of the majority of employees who have not authorized a union to represent them. OSHA’s rule also poses unnecessary risk to the individual joining the inspection and others on the jobsite if the authorized person is not trained to safely walk a construction jobsite. The rule does not include any requirement that the authorized person be equipped or conduct themselves to the same standards as OSHA safety inspectors. Further, the final rule fails to answer who is legally responsible if the third party gets injured during the inspection or harms someone else.

In addition to the lawsuit, on May 17, ABC, as a steering committee member of the Coalition for Workplace Safety, and 57 other employer organizations sent a letter to members of the U.S. House of Representatives urging them to pass Rep. Mary Miller’s, R-Ill., Congressional Review Act resolution to nullify the final rule.

The CWS letter states, “The resolution is vital to safeguarding the mission of workplace health and safety inspections. Without this legislation, OSHA CSHOs will be forced into an impossible position of policing labor disputes, for which they are simply unequipped. It would protect employers against individuals looking to further their own agendas and safeguard their property rights. It would also protect workers’ right to have their voice heard when determining workplace representation.”

In a strong and clear decision, the Hampden Superior Court has issued an injunction preventing the Springfield Water and Sewer Commission (SWSC) from imposing a union-only project labor agreement on the construction of the West Parish Water Treatment Plant. In a decision issued on 5/16/24, Justice Michael K. Callan Wrote: "The public benefits from an open, fair, competitive and robust bidding process. The PLA requirement unnecessarily curtails that without legal justification." The legal challenge was brought by several merit shop plaintiffs, including Wayne J. Griffiin Electric, Inc. and ABC MA who were represented by atty. Chris Whitney of Pierce Atwood LLP.

"This is a great victory for open competition that benefits our members and the taxpaying public," said ABC MA President Greg Beeman. In response to the ruling, SWSC issued an addendum on 5/20 removing the PLA requirement and extending the bid dates to 6/4 for sub bids and 6/13 for GC bids.. ABC MA and the other plaintiffs are reviewing this addendum and extension to determine if it is adequate. The SWSC has scheduled a meeting in Executive Session on 5/21 to discuss the court decision.

In his decision, Judge Callan, wrote:

“The evidence before the court is that the PLA poses such a significant disadvantage to open shops as to render a competitive bid impossible. Certainly, in theory, Griffin and others can bid on the Project, but it is bidding blindly, and utterly defies common sense and logic to think that it is a real chance on "equal footing." No reasonable, otherwise highly qualified contractor or subcontractor would entertain such a colossal risk. For all intents and purposes, the PLA excludes open shops from bidding, as it essentially requires bidders to execute an agreement to use union laborers on the Project.”

There had been a lot of activity around this PLA leading up to this decision. Atty. Chris Whitney filed the request for an injunction against the imposition of the PLA on April 23. Plaintiffs are Wayne J. Griffin Electric, General Mechanical Contractors and ABC MA and the Merit Construction Alliance. In related good news, our application to the National ABC Construction Legal Rights Foundation has been approved in the amount of a $30,000 match. That is for the injunction stage – if there is an appeal phase, we could do another application.

In its 4/11/24 editorial, written before the lawsuit was filed, the Republican/MassLive wrote: “So far no party has sued to enjoin the use of the PLA. The project will likely move forward- under an agreement we consider to be based on flimsy grounds that do not meet the rigorous test set by the SJC in the Malden case.” Now that we have this court injunction, we can say that the court agrees.

In a 5/19/24 editorial, the Republican/MAssLive wrote: “ It is always refreshing to see the judiciaryperform its function correctly, as was the case with Judge Callan’s ruling, because in court cases, agencies such as the commission can’t skate by on speculative rhetoric and fear-mongering. They need to support decisions based on facts and evidence. The commission’s worry about labor unrest wasn’t based on facts or evidence, but stemmed, in our view, from being lobbied.”

The March 2024 not seasonally adjusted national construction unemployment rate was 5.4%, down 0.2% from the previous year, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released by Associated Builders and Contractors. The analysis also found that 29 states had lower unemployment rates over the same period, two states were unchanged (New Jersey and Oklahoma) and 19 states were higher.



National NSA payroll construction employment was 275,000 higher than in March 2023. Since February 2022, seasonally adjusted construction employment has exceeded its pre-pandemic peak of 7.6 million. As of March 2024, SA payroll construction employment stood at 8.2 million.



Indicating the relative tightness of the construction employment market in many states, this March, 31 states had lower construction unemployment rates compared to March 2019 (pre-pandemic) and 19 states had higher rates.


“Despite elevated interest rates, construction activity and employment continue at a healthy pace,” said Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Builders are hiring as they seek to replace retiring workers and anticipate winning future work. Nonresidential construction activity and employment continue to benefit from federal funding and tax incentives for manufacturers, and funding for state and local infrastructure projects is strong.”

Recent Month-to-Month Fluctuations 

In March, every state had lower estimated construction unemployment rates than in February. The last time that all 50 states had lower rates than in the previous month was in May 2018.


The Top Five States 

The five states with the lowest estimated NSA construction unemployment rates for March were:

1. Maryland, 1% 

2. North Dakota, 1.5% 

3. Utah, 1.7% 

4. Iowa, 2.2% 

5. Georgia, 2.3% 

North Dakota, Iowa and Georgia each posted their lowest March NSA estimated construction unemployment rate on record. Utah notched its second-lowest March rate, behind 2022’s 1.6% rate. Maryland had its second-lowest March rate, behind last year’s 0.8% rate.

The Bottom Five States

The five states with the highest March estimated NSA construction unemployment rates were:

46. Illinois, 8.6% 

47. New Jersey, 9.3% 

48. Connecticut and Vermont (tie), 10.2% 

50. Rhode Island, 16.2% 

Illinois had its second-lowest March NSA estimated construction unemployment rate since 2019’s 5.1%. Meanwhile, New Jersey had its lowest March rate since 2019, matching last year’s 9.3% rate. Despite posting the highest construction unemployment rate, Rhode Island had the largest monthly decline in its rate, down 8.6%. It was followed by Connecticut and Vermont.

Click here to view graphs of U.S. and state overall unemployment rates (Tab 1) and construction unemployment rates (Tab 2) showing the impact of the COVID-19 pandemic, including a graphing tool that creates a chart for multiple states. To better understand the basis for calculating unemployment rates and what they measure, check out the Background on State Construction Unemployment Rates.
 

 

The construction industry added 9,000 jobs on net in April, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data. On a year-over-year basis, industry employment has increased by 258,000 jobs, an increase of 3.2%.

Nonresidential construction employment increased by 7,800 positions on net, with growth registered in all three major subcategories. Nonresidential specialty trade added the most jobs, growing by 6,600 positions. Nonresidential building and heavy and civil engineering added 900 and 300 jobs, respectively.

The construction unemployment rate fell to 5.2% in April. Unemployment across all industries rose from 3.8% in March to 3.9% last month.

“It is really quite remarkable that the nation’s nonresidential construction sector continues to add jobs so consistently in an environment characterized by elevated project financing costs,” said ABC Chief Economist Anirban Basu. “At the heart of growing demand for construction workers in America is the prevalence of megaprojects in many parts of the country, including major manufacturing plants, data centers and public works.

“Based on ABC’s Construction Confidence Index, there is more hiring to come,” said Basu. “While there is observable weakness in certain industry segments, particularly in the challenging office market, ongoing spending growth in other construction segments has thus far more than fully countervailed that softness. Many megaprojects are just now beginning construction, strongly suggesting a stable U.S. nonresidential construction labor market for months to come. Such considerations are also consistent with relatively rapid increases in construction worker compensation during the balance of 2024.”


 

 

By: Joe Camilo, Tocco Building Systems

All of us know that the biggest asset any contractor can have is a high-quality, well-trained workforce. To make that a reality for more ABC Massachusetts members, the Gould Construction Institute (GCI) has broken ground on a new bricks and mortar facility that will enhance its curriculum with hands-on learning.

The groundbreaking took place on May 2 at the Billerica building owned by long-time member Medford Wellington Service Company, Inc., with a ceremony that included a gold sledgehammer and shovel symbolizing the groundbreaking event and was attended by staff from Gould, ABC, Medford Wellington and project construction manager Windover Construction.

Windover will be working with multiple ABC member contactors on the 12-week project to build six classrooms with state-of-the-art shop and equipment space for hands-on practical education. The facility is scheduled to be complete in time for the start of the school year in September.

Gould’s current model of renting space at night in existing schools has increasing limitations, especially as more schools host their own after-dark programs. While GCI will continue to offer classes in various locations around Massachusetts, the new facility provides more flexibility to do things like expand daytime training programs. The school started its first daytime electrical program last year. Based on its success, GCI plans to expand daytime offerings in the new facility.

Other benefits include the ability to offer apprenticeship training year-round, including a summer semester to allow students an opportunity to fast track their educational hours.

The facility will also allow Gould and ABC MA to offer workforce programs that will bring more people into the trades, such as pre-apprenticeship cohorts, youth summer camps and career fairs. From a public relations perspective, it will increase brand awareness, as the space will have GCI/ABC signage and provide a location to showcase our training programs to state and local officials.

We will continue to share updates and photos on the facility’s progress, as well as opportunities for you to learn how you can support our new educational center with a variety of sponsorship and contribution opportunities.