ABC MA Awards 2023 Building Our Future Scholarships
ABC MA’s Building our Future Scholarship awarded scholarships to six students this academic year who are pursuing a post-secondary construction education, including three scholarships awarded to students enrolled in a trade apprenticeship program with ABC’s Gould Construction Institute and two pursuing construction management degrees at Wentworth Institute of Technology.
The ABC Building Our Future Scholarship are awarded annually to develop future talent for the construction industry to worthy candidates pursuing a post-secondary education in construction. It supports students pursuing both trade apprenticeships and collegiate degrees.
The scholarship is open to any student who meets the following criteria:
Trade Apprenticeship Scholarships ($1, 500 each)
Christina Hodel –North Bennet St. School, CarpentryAndres Luna – Gould Construction Institute, Sheet MetalMason Pike – Gould Construction Institute, Sheet Metal Jorge Pineda – Gould Construction Institute, Sheet Metal
Collegiate Scholarships ($2,500 each)
Riley Abbott – Wentworth Institute of Technology, Construction ManagementKenneth Padula – Wentworth Institute of Technology, Construction Management
The Building Our Future Scholarship Fund was established by the ABC MA Board of Directors in 2015 and is approved by the IRS as a 501 (C) (3) not-for-profit organization.
Biden Administration’s Inflationary PLA Mandate Policy Nears Release
On Sept. 7, the Federal Acquisition Regulatory
Council’s final rule on the Use of Project Labor Agreements for Federal Construction Projects, which would mandate anti-competitive and inflationary project labor agreements on large-scale federal construction contracts, arrived at the Office of Management and Budget’s Office of Information and Regulatory Affairs for review. This is the final step before the rule will be published in the Federal Register and take effect.
The rule will finalize a proposed rule released by the FAR Council on Aug. 19, 2022, which mandated the use of PLAs on all federal construction contracts of $35 million or more. The proposal is a direct result of President Joe Biden’s Feb. 4, 2022, Executive Order 14063, Use of Project Labor Agreements for Federal Construction Projects, which directed the FAR Council to mandate PLAs on large federal construction projects. Details on the final rule are not yet available, but it is expected to closely match the proposal.
ABC previously strongly criticized the proposed rule in a statement: “ABC calls for the immediate withdrawal of this illegal proposed rule and its imposition of anti-competitive and inflationary government-mandated PLAs on federal contracts,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “PLA mandates undermine economy and efficiency in federal contracting, increase construction costs by 12% to 20%, create project delivery delays and discriminate against nonunion contractors and workers, who comprise 87.4% of the construction workforce.
ABC actively opposed the proposed rule, including with the following actions:
Once finalized, this proposal will replace President Barack Obama’s 2009
Executive Order 13502, which encourages, but does not require, federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis, and permits states and localities to mandate PLAs on federally assisted projects. The Biden administration expects its proposed rule to affect about 120 federal contracts valued at $10 to $14 billion per year.
Publication of the final rule is expected within the coming weeks. Stay tuned to Newsline for additional information upon the rule’s release.
ABC Disappointed in NLRB’s Cemex Decision
On Aug. 25, 2023, the National Labor Relations Board issued its decision in Cemex Construction Materials Pacific, LLC, which imposes a new framework that greatly expands the Board’s ability to impose unions on employees without a secret ballot election. The Board’s decision overrules precedent that has stood for over half a century.
The ABC-led Coalition for a Democratic Workplace issued the following statement from ABC Vice President of Legislative & Political Affairs and CDW Chair Kristen Swearingen:
“The Board’s decision to force unions on employees without an election is contrary to the law and the fundamentals of workplace democracy. Employees deserve the right to decide whether or not they want union representation through a secret ballot election. The Board should be protecting this right and doing everything in its power to promote employee participation in elections—not forcing unions on employees based on unreliable authorization cards. The Board decision overrules precedent that has stood for over half a century and been upheld by the U.S. Supreme Court. As dissenting Member Kaplan explained, the new standard will have ‘the primary effect of negating the rights of current employees rather than furthering them’ and therefore ‘defeats, rather than effectuates, the policies of the [Act].’
“Not only is CDW disappointed in the ruling, but we’re disappointed that the Board chose to move forward with such a fundamental change to labor law without seeking input from stakeholders. This is more concerning given that CDW and others specifically called on the Board to invite amicus briefs in the case. The regulated community should have had an opportunity to express their concerns before such a radical change to policy was made.”
On May 3, 2022, ABC joined CDW in submitting a motion that requested the NLRB to solicit amicus briefs in Cemex in response to the general counsel’s request that the Board overrule multiple longstanding and significant Board precedents in the case.
additional analysis on the decision.
NLRB Revives Controversial 2014 ‘Ambush’ Election Rule—What Should Employers Know?
Despite being litigated for years, the Biden administration’s National Labor Relations Board has revived controversial policy from the Obama era in the form of its Representation-Case Procedures final rule. The direct final rule, issued without notice and the opportunity to comment, essentially restores provisions of the “ambush” election rule of 2014 and rescinds the remaining ABC-supported provisions of the 2019 final rule. The rule will apply to representation petitions filed on or after Dec. 26, 2023, and employers will have less time to respond to representation petitions.
“The Board’s efforts to again reduce the amount of time between when a union files a representation petition and an election takes place imposes unnecessary urgency on employers, leaving them susceptible to violations of their due process rights and deprives employees of the time needed to become fully informed before deciding whether or not to unionize,” said Ben Brubeck, ABC vice president of regulatory, labor and staff affairs. “Ultimately, the rule infringes on the rights of employers and employees to a fair pre-election process and will have a particularly adverse impact on small construction firms, which typically do not employ legal counsel."
Changes in the 2023 final rule include:
1. Scheduling of Pre-Election Hearing. The pre-election hearing will generally be scheduled to open eight calendar days from service of the Notice of Hearing. Under the 2019 rule, the pre-election hearing would generally be scheduled to open 14 business days from service of the Notice of Hearing.
2. Postponement of Pre-Election Hearing. Regional directors have discretion to postpone a pre-election hearing for up to two business days upon request of a party showing special circumstances and for more than two business days upon request of a party showing extraordinary circumstances. Under the 2019 rule, regional directors could postpone a pre-election hearing for an unlimited amount of time upon request of a party showing good cause.
3. Due Date for Nonpetitioning Party’s Statement of Position. The nonpetitioning party’s Statement of Position will be due seven calendar days after service of the Notice of Hearing (three days sooner than under the 2019 rule). Under the 2019 rule, a nonpetitioning party’s Statement of Position was due to be filed eight business days (or 10 calendar days) after service of the Notice of Hearing.
4. Postponement of the Statement of Position. Regional directors have discretion to postpone the due date for the filing of a Statement of Position for up to two business days upon request of a party showing special circumstances and for more than two business days upon request of a party showing extraordinary circumstances. Under the 2019 rule, regional directors could postpone the due date for an unlimited amount of time upon request of a party showing good cause.
5. Responsive Statement of Position. A petitioner shall respond orally to the nonpetitioning party’s Statement of Position at the start of the pre-election hearing. Under the 2019 rule, a petitioner was required to file and serve a responsive written Statement of Position three business days prior to the pre-election hearing.
6. Posting and Distribution of Notice of Petition for Election. An employer will post and distribute the Notice of Petition for Election to inform its employees approximately three days earlier than under the 2019 rule. An employer has two business days after service of the Notice of Hearing to post the Notice of Petition for Election in conspicuous places in the workplace and to electronically distribute it to employees if the employer customarily communicates with its employees electronically. Under the 2019 rule, an employer had five business days for the requisite posting and electronic distribution.
7. Litigation of Eligibility and Inclusion Issues. Disputes concerning individuals’ eligibility to vote or inclusion in an appropriate unit ordinarily do not need to be litigated or resolved prior to an election, and regional directors have authority to exclude evidence that is not relevant to determining whether there is a question of representation. Under the 2019 rule, individual eligibility and inclusion issues were “normally” to be litigated at the pre-election hearing and resolved by the regional director prior to the election.
8. Briefing Following Pre- and Post-Election Hearings. Parties may file post-hearing briefs with the regional director only with the regional director’s special permission (following pre-election hearings) or hearing officer only with the officer’s special permission (following post-election hearings) and within the time and addressing only the subjects permitted by the regional director or hearing officer. Under the 2019 rule, parties were entitled to file briefs up to five business days following the close of a pre- or post-election hearing, with an extension of an additional 10 business days available upon a showing of good cause.
9. Specification of Election Details in Decision and Direction of Election; Notice of Election. Regional directors ordinarily should specify the election details - (the type, date(s), time(s), and location(s) of the election and the eligibility period)—in the decision and direction of election and should ordinarily simultaneously transmit the Notice of Election with the decision and direction of election. The parties will have already taken positions with respect to the election details in writing prior to the hearing and on the record at the hearing. Under the 2019 rule, regional directors were allowed to convey election details in the decision and direction of election (and to simultaneously transmit the Notice of Election with the decision and direction of election), but emphasis was placed on their discretion to convey them in a later-issued Notice of Election.
10. Elimination of the 20-Business Day Waiting Period Between Issuance of the Decision and Direction of Election and the Election. Regional directors shall schedule elections for “the earliest date practicable” after issuance of a decision and direction of election. While the 2019 rule contained the same language, it also imposed a 20-business day waiting period between the decision and direction of election and the election that the 2014 rule had eliminated.
See the NLRB comparison chart of prior and new Representation Case Procedures as well as the fact sheet for more information.
Additionally, learn more about the 2023 final rule and what comes next in ABC general counsel Littler Mendelson’s analysis.
Also, ABC will be offering an ABC members-only webinar on NLRB recent decisions and rules. Details will be posted soon in Newsline.
ABC vehemently opposed the 2014 rule and filed a legal challenge against it.
Nonresidential Construction Spending Increased Slightly in July, Says ABC
National nonresidential construction spending grew 0.1% in July, according to an Associated Builders and Contractors analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.08 trillion and is up 16.5% year over year.
Spending was up on a monthly basis in 8 of the 16 nonresidential subcategories. Private nonresidential spending increased 0.5%, while public nonresidential construction spending was down 0.4% in July.
“After today’s jobs report, which indicated that nonresidential construction added an outsized number of jobs in August, one would have expected a strong construction spending growth number as well,” said ABC Chief Economist Anirban Basu. “Alas, the economic data, just like the economy, continue to be full of surprises. In July, nonresidential construction spending barely expanded. Once one adjusts for inflation, spending declined in real terms.
“Perhaps the bigger surprise is that construction spending weakness was not concentrated in the private developer-driven segments that have struggled to establish consistent momentum, but in a number of public construction segments,” said Basu. “Monthly spending was down in the highway/street, transportation, sewage/waste disposal and conservation/development categories. However, each of these categories has experienced year-over-year spending growth.
“Since nonresidential construction hiring was strong last month, the expectation is that July’s construction spending number will prove to be an aberration,” said Basu. “Spending growth should be solid going forward, driven in large measure by several massive construction projects in development or early construction stages. That said, those segments that depend most on bank financing are poised to weaken going forward.”
We must take suicide prevention seriously
We all know that construction is a great industry that offers lucrative careers without the need for a four-year college degree – and the massive debt that so often accompanies it. There are few among us who regret our career choice.
But we also need to be realistic about the fact that construction has one of the highest suicide rates of any industry. In 2020, the Centers for Disease Control and Prevention reported that the construction industry had one of the highest rates of death by suicide among their workers, 5,242 in 2018, five times higher than U.S. construction worker fatalities on jobsites. Long days of hard work can take their toll, even on the strongest men and women.
September is Suicide Prevention Month. It’s an issue ABC takes very seriously, and I hope you will as well. On September 27, our Chapter is hosting a webinar entitled “Talk Saves Lives: Suicide Prevention Education” from 7:30 to 9:30 am. You can register for it here.
ABC national is one of 75 members of the Construction Industry Alliance for Suicide Prevention, which provides construction workers and employers with resources including free suicide prevention training, the Suicide Prevention Lifeline call center, the Crisis Text Line, toolbox talks and speakers who can provide in-person, recorded and online education on suicide awareness, prevention and postvention. And under a new federal program, help-seekers can simply call 988 to connect to mental health caregivers.
ABC believes it is important that we all take the construction suicide crisis seriously. I share this belief and am learning more about how I can help. I look forward to ABC’s September 27 webinar, and hope you can make it as well. If you have questions, don’t hesitate to go to the Construction Industry Alliance for Suicide Prevention website at preventconstructionsuicide.com to learn more.
ABC: Construction Job Openings Decreased by 23,000 in July
The construction industry had 363,000 job openings on the last day of July, according to an Associated Builders and Contractors analysis of data from the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings decreased by 23,000 from June but are up by 10,000 from the same time last year.
“The demand for labor is beginning to slow,” said ABC Chief Economist Anirban Basu. “Across all industries, job openings are now at the lowest level since March 2021 and the rate at which workers are quitting their jobs has returned to the pre-pandemic norm. As consumer spending buckles under the weight of inflation and the effects of higher interest rates begin to weaken growth, the labor market should continue to cool.
“Unfortunately, the demand for construction workers remains elevated relative to supply,” said Basu. “While the number of open, unfilled construction jobs declined in July, 4.4% of industrywide positions are currently unfilled, a greater share than one year ago and at the start of the pandemic. As a result, contractors remain reluctant to lay off workers. With a majority of contractors expecting to increase their staffing levels over the next six months, according to ABC’s Construction Confidence Index, labor scarcity should remain a headwind through the end of 2023.”
ABC: DOL Overtime Rule Creates More Risks and Costs in Face of Economic Headwinds
Associated Builders and Contractors issued the following statement opposing the U.S. Department of Labor‘s proposed rulemaking that would alter overtime regulations under the Fair Labor Standards Act. The proposal increases the minimum salary level threshold to $55,068 annually for a full-year worker and automatically updates the threshold every three years.
“ABC is disappointed that the DOL is moving forward with a proposed overtime rule since multiple industries, like construction, are still grappling with the lingering economic consequences of inflation, global supply chain disruptions, rising materials prices and workforce shortages, all of which push operational costs ever higher,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs.
“It is unfortunate that the DOL did not listen to our repeated requests to abandon or postpone issuance of the proposed overtime rule until the current economic situation stabilizes or improves, allowing employees and employers to fully navigate the paradigm shift of work in America without new unnecessary and costly red tape,” said Brubeck.
On May 25, 2023, ABC, as a steering committee member of the Partnership to Protect Workplace Opportunity, as well as 103 other organizations, sent a letter to Acting Secretary of Labor Julie Su, urging her to abandon or at least postpone issuing the DOL’s proposed rulemaking that would alter the overtime regulations under the FLSA. Further, the letter stated that the DOL’s last update to the overtime regulations went into effect in 2020—just three years ago, which strongly suggests there is no need for urgency in issuing more changes.
In Spring 2022, ABC and the employer community participated in DOL listening sessions warning that any rule change is ill-advised.
In 2016, the Obama administration issued a final overtime rule that would have doubled the minimum salary level for exemption from $23,660 to $47,476 per year. ABC, along with several other business groups, sued the DOL in federal court and succeeded in blocking the rule from taking effect.
In 2019, the Trump administration issued a new overtime rule, which formally rescinded the 2016 rule and readjusted the minimum salary level for exemption to $35,568 per year. The final rule went into effect on Jan. 1, 2020.
ABC Opposes New OSHA Proposal To Allow Union Access to Merit Shop Jobsites
Associated Builders and Contractors has announced its opposition to the U.S. Department of Labor’s Occupational Safety and Health Administration announcement of a proposed rule, Worker Walkaround Representative Designation Process. The proposed rule would allow an employee to choose a third-party representative, such as an outside union representative, to accompany an OSHA inspector into nonunion facilities.
“ABC is deeply disappointed that the Biden administration is trying to revive a failed Obama-era initiative, which was bad policy then and is bad policy now,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This proposal does nothing to promote workplace safety and it will have a substantial negative impact on the rights of employers and their employees.”
“By allowing outside union representatives 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,” said Brubeck. “Unfortunately, many outside union organizer representatives have a biased agenda that is not focused on safety or health, which could distract OSHA inspectors from their primary purpose of workplace safety.
“OSHA can have a bigger impact on jobsite safety by fostering positive partnerships with employers and promoting safety practices that produce results," said Brubeck. "For example, in ABC’s 2023 Safety Performance Report, top-performing STEP participants achieved a 688% improvement in safety performance compared to the U.S. Bureau of Labor Statistics construction industry average in 2022.”
ABC continues to review the proposed rule and assess options for a legal challenge. To learn more about the rule, register for ABC’s members only webinar on OSHA developments affecting the construction industry on Sept. 20 at 2 p.m. ET.
To learn what employers can do to prepare, see ABC general counsel’s, Littler Mendelson’s, analysis.
On Feb. 21, 2013, OSHA issued a letter of interpretation endorsing union representatives and other nonemployee third parties accompanying OSHA inspectors on walkaround inspections at nonunion workplaces, which ABC adamantly opposed, expressing serious concerns. OSHA eventually rescinded the letter of interpretation on April 25, 2017.
MASS SJC RULES EMPLOYER COMMITTED "HIDDEN BIAS" DISCRIMINATION
On June 21, 2023, the Massachusetts Supreme Judicial Court issued its decision in
Adams v. Schneider Electric USA, Inc., addressing the so-called “Cat’s Paw” theory of liability. In reversing summary judgment originally granted in favor of the employer Schneider Electric, the SJC concluded that an employer can still violate the Massachusetts anti-discrimination statute, G.L. c. 151B, where there is evidence that a manager, instructed to lay off employees, furthered a discriminatory corporate policy without even knowing it. The concept, adopted by the SJC, is often referred to as the “cat’s paw” theory of discrimination.
The term "Cat's Paw" originates from an Aesop fable, in which a monkey convinces a cat to snatch roasting chestnuts from a fire. The cat obliges, but the hot chestnuts burn its paws while the monkey enjoys the rewards. In the context of discrimination, the Cat's Paw Theory refers to a situation where a biased individual, the "monkey," uses another individual, the "cat," as a mere instrument to advance their discriminatory agenda. In the employment context, the Cat's Paw Theory often arises when a decision-maker relies on the recommendations or information provided by a biased employee or supervisor without conducting an independent evaluation. This biased individual, consciously or unconsciously, influences the decision-making process, leading to discriminatory outcomes. The decision-maker may be oblivious to the underlying prejudice, effectively becoming the "cat" that carries out the biased individual's wishes.
Adams concerned a claim of age discrimination brought by a laid off 54-year old employee of Schneider Electric. The trial judge allowed Schneider Electric’s motion for summary judgment, holding that because the plaintiff acknowledged that his direct manager, the individual who directly made the termination decision, harbored no discriminatory animus towards him the company could not be liable. The SJC disagreed and concluded that the manager’s direct knowledge of the company’s alleged discriminatory motives was unnecessary, reasoning that an innocent decision-maker can nonetheless further a discriminatory corporate purpose set in motion by those above him.
The Cat's Paw Theory and the SJC’s decision in Adams serves as a critical legal doctrine to combat hidden biases and hold employers accountable for discriminatory practices. It recognizes that discriminatory intent can exist through the actions of an intermediary or by proxy, rather than explicitly emanating from the ultimate decision-maker. By acknowledging the influence of biased individuals within organizational hierarchies, this theory emphasizes the need for employers to be vigilant in evaluating the sources of information and recommendations that impact employment decisions.
To avoid falling victim to this theory, the following are a few strategies to consider:
ABC: Monthly Construction Input Prices Unchanged in July
Construction input prices were unchanged in July relative to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices fell 0.1% for the month.
Overall construction input prices are 3.1% lower than a year ago, while nonresidential construction input prices are 2.7% lower. However, prices increased in all three energy subcategories. Natural gas prices were up 11.0% in July, while crude petroleum and unprocessed energy materials prices increased 8.4% and 8.0%, respectively.
“Goods prices continue to stagnate in the context of improved supply chains and a sluggish global economy,” said ABC Chief Economist Anirban Basu. “It has been the improvement of supply chains that best explains recent positive economic outcomes in the U.S. economy. As supply chains have normalized, unmet demand has been more readily satisfied. That has propelled transactional volume and economic growth. At the same time, the improved supply chain has helped push prices lower, contributing to the disinflation observable both in yesterday’s consumer price index data and today’s producer price index release.
“With the exception of energy prices, which are heavily influenced by a cocktail of geopolitics, weather and investor frenzy, construction materials prices should be reasonably stable during the months to come,” said Basu. “One exception may be construction equipment prices. The price of equipment expanded nearly 2% on a monthly basis in July and nearly 10% over the past year. Many contractors continue to complain about lengthy lead times for equipment as the nation continues to expand spending on infrastructure.”
ABC’s Construction Backlog Indicator Up in July, Contractors Remain Confident
Associated Builders and Contractors reported that its Construction Backlog Indicator increased to 9.3 months in July, according to an ABC member survey conducted July 20 to Aug. 4. The reading is up by 0.6 months since July 2022.
View the full Construction Backlog Indicator and Construction Confidence Index data series. The South remains the region with the highest level of backlog, despite being the only region with lower backlog on a year-ago basis. Backlog gains in July were concentrated in the commercial and institutional category.
ABC’s Construction Confidence Index reading for profit margins and staffing levels moved higher in July, while the reading for sales fell slightly. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.
“Nonresidential construction backlog continues to expand, which is precisely what contractors had predicted six months ago," said ABC Chief Economist Anirban Basu. "For many months, contractors have been signaling an expectation that demand for their services would continue to expand despite high and rising interest rates and a spate of regional bank failures.
“That said, there are some surprises in the data,” said Basu. “Backlog declined in both the infrastructure and heavy industry categories, possibly because the current administration is striving to reserve many large-scale projects for unionized firms. ABC members are largely nonunion, and therefore may be locked out of a meaningful proportion of significant opportunities. Diminished competition for such projects would tend to drive up construction service delivery charges, much of which are financed by American taxpayers."
Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on May 12, 2020, to better reflect the survey period. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.
As Summer winds down, a busy Fall ahead
Summers are short in New England. With this one beginning to wind down, ABC MA is offering some things that members can look forward to this Fall.
One is our annual Excellence in Construction Awards (EICA) competition. The entry deadline is Tuesday, September 5, so you’ll need to get to work soon if you’d like to participate. Just go to https://www.abcma.org/Membership/Excellence-in-Construction-Awards to learn everything you need to know about how to enter. Winners will be honored at the EICA Awards Dinner, one of our Chapter’s signature events, on Thursday, November 2nd at the Four Points Sheraton in Norwood.
September is also the deadline to enter the STEP (Safety Training and Evaluation Process) awards program, which is a safety management system that was developed and written by contractors, for contractors. STEP provides a tool for ABC members to measure their safety performance on 25 key components through a detailed questionnaire with the goal of implementing or enhancing safety programs that reduce jobsite incidents. The application and additional information can be found here.
The EICA Awards Dinner is just the first of three big November happenings. November 13-19 is National Apprenticeship Week, which showcases the importance and success of apprenticeship. Next up is our Chapter’s local Craft Championships, where ABC member company employees compete in various trades, on Saturday, November 18 at Medford High School. Winners will move on to compete in the national championships, to be held at ABC’s National Conference in the Spring of 2024.
There may be a lot going on this Fall, but Summer’s not done yet! I hope you’ll join us for ABC MA’s “Last Blast of Summer” on Thursday, August 31 at the Cove in Fall River. Register here to join us for cocktails and hors d'oeuvres while taking in the spectacular views. In addition to networking with fellow members, you’ll have the opportunity to meet with and learn more about our associate and supplier members and how you can take advantage of the benefits they offer. I look forward to seeing you all there!
Whether you want to enjoy the fleeting days of Summer, are looking to ramp up again this Fall, or (hopefully) both, ABC MA has you covered. We hope to see you at our events, and that your company will take advantage of one or more of our upcoming recognition opportunities.
DOL High Road Workforce Development Program Map Snubs Nonunion Programs
On July 13, the U.S Department of Labor launched its “High Road to the Middle Class” map, highlighting existing workforce development programs that meet certain criteria to be designated by the DOL as “high road training programs.” The DOL defines these programs using the following criteria:
Due to the union partnership requirements, all construction workforce development programs that do not involve construction unions have been excluded from inclusion on the map.
“ABC agrees with the DOL on the importance of high-quality, demand-driven and accessible programs to upskill the construction workforce, but unfortunately the agency has taken a discriminatory and partisan approach with the ‘High Road to the Middle Class’ program that fails to acknowledge the value of employer and association workforce development programs not affiliated with unions,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This is especially egregious considering more than 88% of the construction workforce voluntarily chooses not to be part of a union.”
“We call on the DOL to embrace inclusive, all-of-the-above workforce development policies to educate the more than half a million construction workers needed in 2023 alone. This includes the efforts of ABC’s 68 chapters, which are educating craft, safety and management professionals using innovative and flexible learning models like just-in-time task training, competency-based progression and work-based learning, in addition to more than 300 federal and state government-registered apprenticeship programs across over 20 different occupations. All of these efforts are necessary to develop a safe, skilled and productive workforce. In addition, ABC member companies participate in ABC education programs and administer comprehensive in-house workforce development programs as well as GRAPs independent of ABC’s network and invested an estimated $1.5 billion in construction industry workforce development in 2022.”
Additional information on the “High Road to the Middle Class” program is available on the DOL’s blog. Learn more about ABC’s workforce development efforts at abc.org/workforce.
ABC Applauds House Committee’s Passage of the Fair and Open Competition Act
WASHINGTON, July 12—Associated Builders and Contractors applauds the U.S. House of Representatives Committee on Oversight and Accountability’s passage of the Fair and Open Competition Act, H.R. 1209. FOCA would protect federal and federally assisted construction contracts from anti-competitive and inflationary government-mandated project labor agreements and allow merit shop contractors and their skilled employees to have a fair chance at competing to win government contracts to build taxpayer-funded construction projects.
“FOCA would ensure that all of America’s workers and qualified contractors are provided the opportunity to compete to build long-lasting, quality projects at the best price for hardworking taxpayers,” said Kristen Swearingen, ABC vice president of legislative & political affairs. “PLA mandates discourage experienced contractors and the 88.3% of the U.S. private construction workforce that chooses not to join a union from competing to win taxpayer-funded contracts to rebuild America’s infrastructure.”
Federal government policies promoting and mandating PLAs on federal and federally assisted contracts will needlessly increase construction costs by 12% to 20% and result in fewer infrastructure projects and jobs created by federal investment in America’s roads, bridges, schools and water and energy infrastructure. President Joe Biden’s February 2022 Executive Order 14063 requires federal general contractors and subcontractors to enter into a PLA as a condition of winning a contract to perform services on a federal construction project worth $35 million or more.
ABC submitted more than 40 pages of comments to the Federal Acquisition Regulatory Council calling on the Biden administration to withdraw a controversial proposed rule codifying EO 14063, which is expected to be issued later this year In addition, ABC has identified a significant number of Biden administration federal agency grants––totaling more than $250 billion for infrastructure projects procured by state and local governments––subject to language and policies promoting PLA mandates and preferences that will increase costs and reduce competition on federally assisted construction projects.
Ahead of the committee vote, ABC sent a letter to the committee and led a coalition letter signed by a coalition of 26 construction and business organizations in support of FOCA.
FOCA (H.R. 1209/S. 537) was introduced by Oversight and Accountability Chairman James Comer, R-Ky. and Sen. Todd Young, R-Ind.
Building Mass Careers Builds the Construction Talent Pipeline
In accordance with our long-time strategic plan, ABC MA has launched Building Mass Careers (BMC), a 501(c)3 charitable organization, to formalize our workforce development program and help provide member companies with the qualified workers we all so desperately need.
BMC connects with Massachusetts One-Stop Career Centers, returning veterans, dislocated workers, new Americans with construction experience in their home countries, out-of-school youth, people with disabilities and college graduates who seek careers in construction. We help them realize that their existing strengths, such as math or computer skills, are transferable to construction, creating a pipeline to the Gould Construction Institute.
The benefits of this new entity aren’t just limited to contractors. Not all the individuals we train will become tradespeople or construction managers. Some will seek a career at one of our suppliers, distributors or equipment rental companies. In short, we will help you find the people you need to thrive.
In recent years, our Chapter has had notable success winning competitive grants that have funded programs that provide construction training to a diverse group of individuals. But we can’t rely on grants alone; we need to ramp up our capacity to attract more people and train them to join member companies. To do this, we need your help in the form of donations to fund scholarships for training and to support students seeking employment, as well as in-kind contributions such as vehicle donations, tools and PPE.
Your generous support will equip us to attend high school career fairs and engage with national organizations such as SkillsUSA, YouthBuild and Job Corps, and vocational schools. It will also help us engage with community-based programs and other non-profits that have clients who could seamlessly join our industry.
We all know construction is one of the few industries that offer family-sustaining wages without the burden of college debt. And demand for skilled construction talent has never been higher. An estimated 650,000 workers are needed to meet that demand this year alone!
We hope you will consider supporting our new workforce development 501(c)3 with a tax-deductible contribution. For more information, please visit
Planning and Awareness Make Work Zones Safer for Everyone
Fatalities that are tied to work zones are edging up nationally, prompting policymakers and construction industry employers alike to act, not just to promote awareness of the risks but to institute improved controls to abate them.
The data paints a worrisome picture: In 2020,work zone fatalities hit a 16-year high, with over 850 deaths and 45,000 injuries recorded. That includes more than 100 road construction workers who died in work zone accidents.
Some states have a better safety record than most, and Massachusetts is among them. Its work zone fatality rate of 5.87 deaths per million licensed drivers (based on 2015-2020 data) puts it near the top of safest states.
But the drive for safer work zone environments is a shared responsibility because it isn’t only workers at risk of such hazards as traffic and heavy machinery, but drivers, pedestrians and even bicyclists are exposed when work requires narrowed lanes, uneven roads and changed traffic patterns.
There are a variety of fixes. One, for example, is to create enforcement zones that use a series of point-to-point cameras to monitor speeds and alert drivers of their average speeds through the work zone. It effectively slows traffic over a longer distance.
Some countries integrate their cameras into a single national system, and it works. After installation on a stretch of freeway in Scotland, the speed limit is adhered to by 99% of drivers, versus only 40% before.
The most effective solution, however, is for firms to be aware of the environment and potential concerns in preparing for projects involving work zones. And, of course, those factors all must be taken into account as they develop a traffic control plan (TCP) to reduce the risk.
Factors influencing a TCP
The backdrop for a traffic control plan that adequately addresses safety should consider various factors:
The importance of TCPs
Each work zone project should have a TCP to improve safety for workers, pedestrians and motorists. The Commonwealth of Massachusetts lays out a comprehensive process for anticipating and mitigating their impacts. It is required for all private development and permit projects for roadways and bridges.
Each work zone must have its own plan for safety, covering several categories that include:
Being aware of the issues and abiding by the controls will go a long way toward maintaining good progress on what can be complicated and high-profile work zones – and keeping workers and the public at large safe in the process.
About the author
Carmine Cimetti is Vice President in the construction specialty group at insurance brokerage Hub International New England. He has over 25 years of experience in construction risk management, operations, planning and project management.
His collaborative approach to construction and risk management has been associated with some of the largest nationally recognized projects in the heavy infrastructure, building, transportation, education and healthcare/life sciences sectors. He presently holds a CSP (Certified Safety Professional), CRIS (Construction Risk Insurance Specialist) and is an OSHA 500 Certified Construction Outreach Instructor. Carmine has a Bachelor of Science in Construction Management from Wentworth Institute of Technology, in addition to an Associate of Science in Building Construction.
ABC’s Construction Backlog Indicator Holds Steady in May
Associated Builders and Contractors’ Construction Backlog Indicator remained unchanged at 8.9 months in May, according to an ABC member survey conducted May 20 to June 7. The reading is 0.1 months lower than in May 2022.
View the historic Construction Backlog Indicator and Construction Confidence Index data series.
Backlog in the infrastructure category ticked up again and has now returned to May 2022 levels. On a regional basis, backlog increased in every region but the Northeast.
ABC’s Construction Confidence Index reading for sales and staffing levels moved lower in May while the reading for profit margins increased. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.
“During a period of ongoing tumult associated with major bank failures, a near-miss debt ceiling crisis and shifting monetary policy, nonresidential construction backlog has remained remarkably stable,” said ABC Chief Economist Anirban Basu. “At nearly nine months, backlog is essentially unchanged from a year ago and the previous month.
“Moreover, contractor confidence remains elevated despite massive increases in cost of capital and growing concerns over the nation’s commercial real estate segment, with firms indicating sufficient demand and associated pricing power that will keep profit margins steady or better,” said Basu. “Contractors also expect to bring on additional talent over the next six months, an indication of ongoing industry expansion.
MESSAGE FROM THE CHAIR: Member Success Kit Helps ABC MA Companies Thrive
Previously I wrote that my priority as ABC MA chair was to help member companies succeed just like earlier generations at our chapter helped me. This month, I’m pleased to offer an example of that help: our chapter’s new Member Success Kit. Just click on the link to find a concise guide to all the ways ABC and our Chapter can help your company.
The kit is a great way for those who joined ABC MA recently to understand all the benefits of membership, and it’s like continuing education for more veteran members who may not be aware of newer programs that can help their company succeed.
Our companies are all about the quality of our employees – our most important resource. ABC MA members get discounts of up to 20 percent at the Gould Construction Institute, our state-approved training affiliate. Gould offers over 125 courses ranging from pre-apprentice training, apprentice craft training, safety and career development. Last year we launched our new daytime Electrical training program.
Does your company do public work or want to get into that market? If so, ABC MA offers a state-approved registered apprenticeship program through our Building Mass Careers initiative.
ABC MA can also help your company get noticed through our awards and recognition programs, such as our Excellence in Construction Awards, which annually honor projects that are the very best in merit shop construction.
Everybody likes saving money, and we offer multiple ways to do it. Membership gives you access to discounts on insurance and benefit costs through our ABC Insurance Trust, Self-Insured Workers’ Compensation Group and The Contractors Plan. Through our national parent organization, you can access discounts on everything from shipping to vehicle fleet management.
And we can help you prepare for the challenges that will inevitably arise. We offer seminars on HR, labor and other important issues, and provide you with access to legal advice and even a free initial 30-minute legal consultation.
Massachusetts can be a tough place for open-shop-construction companies to do business. With that in mind, ABC MA has respected advocates on Beacon Hill who represent you before both the legislative and executive branches of state government.
ABC MA succeeds when our member companies succeed. I urge you to take a look at the new Member Success Kit. I think you’ll be surprised to discover all the ways in which we can help your business.
Insurers, Issues and Indemnification: The New Cost of Delayed Reimbursement
Massachusetts General Law Chapters 93A and 176D, long a compelling and formidable mechanism for consumers, has been extended beyond its usual confines to become a further source of consternation in the insurance industry. The Consumer Protection Act and the Unfair Methods of Competition and Unfair and Deceptive Acts and Practices in the Business of Insurance are dual sides of the same coin, often acting as the other’s counterpart when allegations of deceptive practices arise in the context of trade. A recent ruling by the Massachusetts Appellate Court affirms the influence of these two laws.
An employee for a subcontractor sustained injuries in a fall on a project site and sued the general contractor of the project for negligence. The insurance carrier of the general contractor agreed to indemnify the general contractor subject to a reservation of rights that included reimbursement of defense costs in the litigation. Instead, however, the insurance carrier waited eight months before paying any of the general contractor’s defense costs and only did so after the general contractor sued the insurance carrier for breach of contract, as well as violations of Chapter 93A and Chapter 176D.
The trial court found that the insurance carrier fulfilled its contractual obligations by acknowledging its obligations to pay defense costs at the outset of the litigation. The Massachusetts Appeals Court, however, disagreed. The Appellate Court determined that an unnecessary and unreasonable delay in payment can constitute a violation of both Chapters 93A and 176D. Although the Court refused to define unreasonable delay, the delay of seven months in this litigation was long enough for the insurance carrier to be liable for any penalties imposed by Chapters 93A and 176D.
The decision serves as a grave warning to insurance carriers that delay such reimbursement as courts may find that the insured may still have damages, even if the legal fees are eventually paid, because it may alter the manner in which an insured defends a litigation. Certainly, the threat of suffering the penalties of Chapters 93A and 176D may be enough to limit the number of disputes between insurance carriers and their insured.
During Mental Health Awareness Month, make mental health part of your company’s safety program
Few in construction would dispute that the eight million people the industry employes nationwide are our most valuable asset. These men and women use tools every day. In May, which is Mental Health Awareness Month, we focus on making sure they have the tools they need for suicide prevention and to enhance their mental health.
May 1-5 was also Construction Safety Week. With construction being the industry most at risk for suicide deaths, we must make mental health as much of a priority as our employees’ physical safety. This awareness was behind ABC’s Total Human Health Initiative, which is focused on building a resilient workforce connected though relationships and engaged in performing construction work to a high standard. The initiative incorporates a whole-person approach to engage a person’s body, mind, heart and soul; psychological safety that is respectful and inclusive of a diverse workforce; acknowledgement of the risk of distraction; and impairment and responding with appropriate care.
This year, ABC added total human health as a key component of an effective safety program in its STEP Safety Management System, which for more than 30 years has provided the framework to measure, strengthen and build industry-leading safety programs. Any company can participate in STEP by visiting abc.org/step.
Just as ABC has done, I hope you will incorporate Total Human Health into your company’s safety program. Your employees’ overall health is key to establishing an industry-leading safety culture. Raise the bar by providing support and acknowledging preoccupying concerns in your team members’ daily lives.
There is much work to be done to equip our workforce with the mental health tools they need. Both ABC MA and out national parent organization will continue to look deeper into the complexity of conditions that affect our workforce’s decision-making process. As we learn more, we’ll pass on additional insights into how to protect our industry’s most valuable assets.
Who Bears the Burden for a Fraudulently Intercepted ACH Payment
Imagine you receive an email from a known creditor containing an invoice for an account payable. The email contains instructions for you to pay the invoice through an accredited clearing house (ACH). The email further contains the creditor’s bank account information for depositing the ACH payment. You pay the invoice by depositing the ACH payment as instructed in the email. You later discover the creditor’s email system was hacked and the bank account information provided in the email belonged to third-party hackers. The creditor never received the ACH payment and has not been compensated for the goods or services it provided you. Do you still owe the creditor?
The law is still unclear. However, a recent decision on a preliminary motion by a federal judge of the United States District Court for the District of Massachusetts would indicate that, under certain circumstances, the answer may be yes. The decision sheds new light on the obligations of both purchasers and sellers when payment is made through an ACH.
Whether a purchaser is justified or excused from paying a seller due to a fraudulently intercepted ACH payment will ultimately depend on:
The case involved a breach of contract lawsuit for the sale of eggs. At the beginning of the parties’ contractual relationship, the seller required the purchaser to enter into an ACH Agreement, which provided the terms under which the purchaser would pay the seller for the eggs. The ACH Agreement specified the bank account belonging to the seller and authorized the purchaser to make deposits into that account for payment of the seller’s invoices.
The parties’ contractual relationship was at first uneventful. The seller delivered eggs to the purchaser, and the purchaser paid the seller for the eggs pursuant to the terms of the ACH Agreement. Roughly one-year into the parties’ contractual relationship, however, the purchaser received an email that appeared to be from the seller’s email account stating that the seller’s bank account was changing and that the purchaser would receive new ACH payment instructions. Notably, the correspondence attached to the new ACH payment instructions incorrectly identified the seller’s address, contained at least one additional typographical error, and was not personally addressed or signed.
The purchaser did not require a new ACH Agreement and did not follow up with a telephone call to the seller to verify the bank account in the new ACH payment instructions. For the next three months, the purchaser made nine deposits totaling almost one million dollars into the new bank account, completely unaware that this account was in fact controlled by third-party hackers, not the seller. The purchaser became aware of the fraud only after the seller made demand upon the delinquent account.When the purchaser failed to cure the delinquent account, the seller sued for breach of contract. In defense, the purchaser argued that its failure to pay the seller was justified.
In More Than Half of US States, at Least 90% of the Construction Workforce Does Not Belong to a Union
According to an Associated Builders and Contractors analysis of 2022 state union membership data published recently by UnionStats.com, at least 9 out of 10 construction workers in private industry do not belong to a union in 26 states, up from 24 states in 2021. Nationwide, a record 88.3% of construction workers do not belong to a union, according to the U.S. Bureau of Labor Statistics, up from 87.4% in 2021.
“Data continue to suggest that the vast majority of construction industry professionals freely choose not to join a union,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “This illustrates why it makes no sense for the Biden administration to continue to advance controversial policies requiring workers on federal and federally assisted construction projects to join a union and/or pay union dues through schemes like project labor agreements and other anti-competitive and inflationary policies. Worker choice and freedoms create immense value for taxpayers and the construction industry, yet the Biden administration continues to undermine these principles with burdensome regulations that needlessly raise costs on taxpayer-funded construction projects and steer contracts to unionized contractors and workers.”
The construction industry awaits a final rule implementing President Joe Biden’s Executive Order 14063, which requires project labor agreements on federal construction projects of $35 million or more. Research has found government-mandated PLAs increase infrastructure project costs by 12% to 20%. 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. This executive overreach will also exacerbate the construction industry’s skilled labor shortage of more than half a million people by excluding the 88% of the industry that chooses not to join a union and will undermine taxpayer investments in America’s infrastructure and clean energy projects.
“ABC will continue to challenge anti-competitive regulations that favor special interests and advocate for all construction workers to be welcome to build taxpayer-funded infrastructure projects,” said Brubeck.
ABC’s March Construction Backlog Indicator Down to Lowest Level Since August 2022
WASHINGTON, April 11—Associated Builders and Contractors reported today that its Construction Backlog Indicator declined to 8.7 months in March, according to an ABC member survey conducted March 20 to April 3. The reading is 0.4 months higher than in March 2022.View the historic Construction Backlog Indicator and Construction Confidence Index data series.Backlog slipped in March and is now at its lowest level since August 2022. Backlog is down on a monthly basis in every region except for the South, which continues to be associated with elevated levels of current and future construction activity.
“The deceleration in nonresidential construction activity may have started,” said ABC Chief Economist Anirban Basu. “With widespread fears of recession, credit conditions tightening and more decision-makers turning their attention to cost containment, new construction work may be more difficult for contractors to line up.“While the confidence and backlog data weakened in March, they indicate a slowing of activity rather than a shift into reverse,” said Basu. “There is a widely held view that financial conditions are tightening in the aftermath of the failures of Silicon Valley Bank and Signature Bank. To the extent that this is true, one could anticipate further slowing and less industry confidence during the months ahead.”
March Chairperson’s Message: Women in Construction
Rarely does a day go by in which the leaders of ABC MA companies don’t strategize about how to find and retain the qualified workers we need to meet the demand for our services. Meeting the challenge will require us to broaden our search for talent.
One place we can look is in areas throughout Massachusetts where young people interested in the trades think joining a union is the only way to break into the construction industry. As part of our effort to inform more young people of the opportunities ABC MA companies offer, we have formed a partnership with the Electrical Program at Madison Park High School in Roxbury to help place their graduates in externships and jobs.
The program offers real benefits to graduates of Madison Park’s Electrical program, who will bring with them 300 apprentice hours of related technical classroom instruction to any employer that hires them. The hours can be applied to registered apprenticeship and licensing board requirements. The students will also benefit from subject matter expertise, career counseling and job placement help provided by ABCMA member companies.
Member companies will also benefit from making a new cohort of qualified young tradespeople aware of the many benefits a career in the open shop construction industry offers. Once these students graduate, we’ll be sending their resumes around for our electrical members to consider.
These young people are the new face of their trade. It’s up to us to make sure they know about the rewarding and lucrative career opportunities the open shop can offer them. For more information on employing one of the Madison Park students, contact Steve Sullivan at [email protected].
Construction Employment Decreases By 9,000 in March, Says ABC
WASHINGTON, April 7—The construction industry lost 9,000 jobs on net in March, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has grown by 196,000 jobs, an increase of 2.5%.
Nonresidential construction employment fell by 1,800 positions on net, with declines in 2 of the 3 subcategories. Nonresidential specialty trade lost 6,100 positions, while the number of nonresidential building jobs decreased by 2,800. Heavy and civil engineering added 7,100 net new jobs.
The construction unemployment rate declined to 5.6% in March. Unemployment across all industries decreased from 3.6% in February to 3.5% last month.
“The March employment report may hint at growing economic weakness in the months to come,” said ABC Chief Economist Anirban Basu. “While the nonresidential construction industry lost fewer than 2,000 jobs, the addition of jobs in publicly financed construction categories masks more substantial weakness in private segments. It is precisely those private segments that tend to be most affected by slowing economic growth, deteriorating confidence and concerns regarding the nation’s banking system.
“While the nation continues to progress economically, headwinds are building,” said Basu. “Recession remains a likely outcome within the next 12 months. Contractors generally report healthy backlog and confidence regarding the next six months, but the industry may be positioned for meaningfully weaker conditions in 2024.”
Update Regarding Separation Agreements
In February 2023, the National Labor Relations Board (the "NLRB") issued a decision, McLaren Macomb, 372 NLRB No. 58, that impacts the use of routine confidentiality and non-disparagement provisions common in many separation agreements. Notably, this decision applies to any employees and employers who are covered by the National Labor Relations Act in the private sector, whether or not the employees are represented by a union.
In McLaren Macomb, the NLRB found that broad confidentiality and non-disparagement provisions are unenforceable and that they violate the National Labor Relations Act (the "Act") because they restrict employee rights to engage in protected, concerted activity related to the terms and conditions of employment (or former employment). For example, such provisions limit employees' ability to discuss terms and conditions of employment with other employees and also restrict their right to file an unfair labor practice charge with the NLRB or to assist the NLRB in an investigation.
Similarly, non-disparagement provisions often limit an employee's ability to express their views about the employer to a third party in an effort to seek assistance or to assist coworkers, including in connection with an NLRB investigation or litigation of unfair labor practices. For these reasons, the NLRB held that the non-disparagement provision in McLaren Macomb violated the Act, and offering a severance agreement with such terms was an unfair labor practice.
In March 2023, the NLRB's General Counsel issued a memorandum regarding the McLaren Macomb decision, stating that an employer's efforts to enforce past agreements containing such broad confidentiality and non-disparagement provisions would be considered unlawful.
Note that in most situations, agreements that apply to supervisors will not be impacted because supervisors are excluded from coverage under the Act.
In light of these developments, employers should review carefully any separation agreements offered to covered employees which reference confidentiality and non-disparagement. Note that there may be ways to draft confidentiality and non-disparagement requirements more narrowly to protect the employer's legitimate interests while not limiting employee rights under the Act. When in doubt, seek the assistance of your labor and employment counsel to help you navigate these shifting sands.
One of the biggest challenges our industry faces is finding enough qualified workers to meet the demand for construction services. In that environment, we don’t have the luxury of ignoring any pool of potential talent. ABC MA recognizes this fact – it’s why we’re conducting an ongoing diversity survey with proceeds from a state grant.
One result of this accelerating search for talent is growth in the number of women working in our industry. This year, March 5-11 was Women in Construction Week.
According to the U.S. Bureau of Labor Statistics, the share of women in construction is currently the highest on record, as more women learn that construction offers unique benefits and opportunities. Construction pays well for everyone, regardless of gender. Average hourly earnings are nearly $3 higher than the average of all other private industries, and those earnings are up 5% year over year.
A labor shortage also translates to the potential for advancement and career mobility. From executives and project managers to building inspectors, business developers, engineers, equipment operators, craft professionals and marketing, the opportunities are endless. Construction provides careers, not just jobs. And those family-supporting careers often don’t require a college degree – and the crushing debt that can go along with it.
Construction careers are fulfilling. Workers find purpose in building America, from megaprojects and manufacturing plants to airports and hospitals. A recent report based on the federal Bureau of Labor Statistics’ American Time Use Survey found that construction was among the sectors in which workers reported the highest levels of satisfaction, compared to other industries.
ABC MA believes that recruiting and retaining the best workers will deliver the greatest value to our member companies and the larger community. As we salute the role of women in our industry, I am honored to be the first woman to chair the Board of ABCMA. I applaud the many talented women in our organization. To learn more about opportunities in construction during 2023 Women in Construction Week, March 5-11, visit https://workforce.abc.org/.
Healey Plan Divides Oversight of Development Projects
Gov. Maura Healey wants to separate housing and economic development in the state's bureaucracy, mostly to give housing production the enhanced focus she says it desperately needs. But Healey doesn't want to completely shatter the connection between the two topics.
According to the details of a government reorganization bill she filed last week, Healey wants oversight of public and private community redevelopment corporations and their projects to be divided between the new Executive Office of Housing and Livable Communities, which is supposed assume all of the powers and responsibilities of the existing Department of Housing and Community Development, and the new Executive Office of Economic Development.
Oversight responsibility will be exercised by the Executive Office of Housing and Livable Communities for projects exclusively or primarily focused on housing development, according to a March 1 letter Healey wrote with her bill, and by the Executive Office of Economic Development for projects primarily or exclusively focused on commercial development.
Healey says her bill also duplicates the current legislative authorization for MassWorks, a popular infrastructure grant program, in a new "HousingWorks" statute "dedicated exclusively to funding municipal infrastructure that supports new or redeveloped housing." That change, Healey said, will ensure that officials in the new housing secretariat can make use of the grants currently provided to municipalities "pursuing smart housing growth policies."
The bill also "includes some provisions that update and streamline the organization and administration of agencies" currently under the Executive Office of Economic Development, including the Massachusetts Office of Business Development.
In her filing letter, Healey describes a "housing crisis" in Massachusetts that she says "has been in the making for decades" and contributes to a high cost of living that "places Massachusetts at a significant disadvantage as we compete with peer states to attract and retain businesses. "Cracking that problem, in an environment where key housing decisions are made at the local level, remains the challenge facing Beacon Hill.
"In short, we must create an adequate supply of housing for our young families, workers, and an aging population if we want to remain one of the best states in the nation to live and work, "Healey wrote.
Warmer weather states in the south and west have in recent years drawn new residents in part due to lower cost of living metrics.
February Chairperson’s Message: Getting Back To Basics
If we take a moment to think about when we started in the construction industry, most of us will shake our heads at the thought of how much things have changed. Technology has transformed our lives in recent decades, and it’s unlikely that it’s changed anything more than the way we make a living.
Yet when I think back to the early days after I joined Fernandes Masonry to help my brothers, there are some things I learned that stand the test of time. I didn’t know much about either masonry or the construction industry back then, and a lot of seemingly little things could have turned into very big problems. I needed help, and it was ABC that helped me with challenges like certified payrolls and understanding the rules around what OSHA publications had to be posted in the shop.
My goal is to help member companies succeed just like earlier generations at ABC helped me. Sometimes it’s little tips for avoiding trouble by making sure all the Is are dotted at Ts crossed, and other times it’s bigger things, such as how to help member companies attract and retain the talent that’s so important to all of us right now. My focus will be on providing fellow members with the 2023 version of the help that was so important for me.
To allow me to do that, I ask one thing of you: get involved. Come to events, join a committee, and tell us about the political or regulatory challenges you face. Take advantage of the discounts on insurance and benefit costs through our ABC Insurance Trust, Self-Insured Workers’ Compensation Group and The Contractors Plan. Through our national parent organization, you can access discounts on everything from shipping to vehicle fleet management.
And don’t forget that the ABC’s fully accredited education partner, the Gould Construction Institute, is your school, and membership gets you discounts of up to 20 percent on all your education and training needs, including our new daytime electrical training program.
The pace of change just keeps accelerating, but if ABC is to continue as the voice of open shop contractors, we must continue to provide services that help all our companies succeed. Doing that is my top goal for 2023.
ABC: State Construction Unemployment Is Down in 32 States from a Year Ago
WASHINGTON, Feb. 6—The not seasonally adjusted national construction unemployment rate dropped 0.6% in December 2022 from a year ago, down from 5% to 4.4%, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors. Thirty-two states had lower unemployment rates over the same period, Iowa and Missouri were unchanged and 16 states were higher.
National NSA payroll construction employment was 242,000 higher than in December 2021. From March through December 2022, seasonally adjusted construction employment was above its February 2020 pre-pandemic peak of 7,624,000, except for a slight dip in April. As of December, it was 153,000 greater than its pre-pandemic peak.
Residential construction employment has fully recovered, while nonresidential construction employment is still below its pre-pandemic peak. December SA residential payroll construction employment was 198,000 above its pre-pandemic peak while nonresidential payroll construction employment was 45,000 below its pre-pandemic peak.
In December 2022, 36 states had lower construction unemployment rates and 14 states had higher rates compared to December 2019.
“High interest rates are negatively affecting demand for single-family housing, yet construction employment continues to rise as builders work on their backlog of projects,” said Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “However, developers, builders and contractors are still facing a shortage of skilled workers. So far, construction employers are holding on to their workers as they look beyond current slowing construction demand to the eventual upturn in demand for new projects. Meanwhile, nonresidential construction employers fully expect demand to rise over this year and next as more state and local projects tap into federal funds from the Infrastructure Investment and Jobs Act and move from the planning stage to the execution stage.”
National and state unemployment rates are best evaluated on a year-over-year basis because these industry-specific rates are not seasonally adjusted. However, due to the changing impact of COVID-19, high and rising interest rates and other national and international disruptions, month-to-month comparisons offer insight into the rapidly shifting economic environment for construction employment.
In December 2022, nine states had lower estimated construction unemployment rates than in November, 38 states had higher rates and three (Georgia, Indiana and Tennessee) had the same rate.
The Top Five States
The five states with the lowest December 2022 estimated NSA construction unemployment rates were:
1. Colorado, 1.2%
2. Tennessee, 2%
3. Utah, 2.1%
4. Florida, 2.2%
5. Nebraska, 2.6%
With the exception of Utah, all of these states posted their lowest December estimated NSA construction unemployment rate on record. Utah had its third lowest rate, behind 2021’s 1.7% and 2015’s 2%.
The Bottom Five States
The states with the highest December 2022 estimated NSA construction unemployment rates were:
46. Illinois, 7.1%
47. Ohio, 7.4%
48. Minnesota, 7.6%
49. Wyoming, 10.4%
50. Alaska, 13.3%
Alaska had its second lowest December estimated construction unemployment rate behind 2020’s 11.8% rate and the third largest year-over-year decline in its rate among the states (tied with Pennsylvania), behind Rhode Island and Hawaii, down 2.3% from December 2021. The other four states each had their third lowest December unemployment rate on record.
Click here to view graphs of overall unemployment rates (Tab 1) and construction unemployment rates (Tab 2) showing the impact of the 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.
Construction Adds 25,000 Jobs in January, Says ABC
WASHINGTON, Feb. 3—The construction industry added 25,000 jobs on net in January, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has risen by 294,000 jobs, an increase of 3.9%.
Nonresidential construction employment increased by 19,300 positions on net, with growth in two of the three subcategories. Nonresidential specialty trade added 16,500 net new jobs, while nonresidential building added 4,000 positions. Heavy and civil engineering lost 1,200 jobs for the month.
The construction unemployment rate rose to 6.9% in January. Unemployment across all industries declined from 3.5% in December to 3.4% last month.
“It is virtually impossible to reconcile today’s employment numbers with other phenomena in the U.S. economy,” said ABC Chief Economist Anirban Basu. “America’s labor market remains red hot despite falling retail sales, declining industrial production, bloated inventories and high-profile layoff announcements.
“Today’s jobs report strongly suggests that the Federal Reserve has more work to do,” said Basu. “While many will cheer the jobs report, the bond market did not, with interest rates rising immediately in response to the persistent and surprising strength of the nation’s employment market. While contractors may be thrilled to hear that the labor market remains strong, associated upticks in borrowing costs increase the likelihood of a recession sometime later this year.
“Many contractors may shrug off such concerns given current elevated backlog,” said Basu. “ABC surveys reveal that contractors plan to continue to hire and expand operations. Indeed, the nation’s nonresidential construction industry added more than 19,000 jobs in January. But the outlook may dim later this year as the cost of project financing continues to rise, setting the stage for what could be a meaningfully weaker 2024, at least in construction segments that are primarily privately financed.”
News Release: ABC Massachusetts Announces Creation of a Student Chapter at Benjamin Franklin Cummings Institute of Technology to Mentor Construction Students
Boston, MA, January 23, 2023-The Massachusetts Chapter of Associated Builders and Contractors today announced the establishment of a student chapter at Benjamin Franklin Cummings Institute of Technology, part of the ABC National Student Chapter Network. The NSCN connects ABC chapters to local colleges and universities with construction-related degree programs with the goal of building the construction management pipeline and mentoring future leaders of the construction industry.
"The ABC student Chapter program is a great opportunity for college students to become immersed in the construction industry while in college. Participants will make early connections with companies before they graduate", said Steve Sullivan, Director of Workforce Development at ABCMA, "the student chapter will provide an in invaluable opportunity to do internships, co-ops, community service projects and site visits.”
“It is a privilege to welcome the newest ABC student chapter to this national network of future construction industry leaders,” said Associated Builders and Contractors Vice President of Health, Safety, Environment and Workforce Development Greg Sizemore. “America’s economic engine is fueled by a workforce equipped with durable and transferable skill sets. Networks like these provide the right tools to the future of our workforce to cultivate long-lasting and rewarding career opportunities.”
At the local level, ABC chapters facilitate the interaction of ABC member firms with student chapters through a variety of industry association and school events, including regular membership meetings, guest speakers, internships, community service projects, fundraisers, career fairs/career awareness events, jobsite tours and other activities.
As a member of an ABC student chapter, students are given the opportunity to become more knowledgeable about the construction industry while learning the importance of the merit shop philosophy and free enterprise through active association involvement. Involvement in the student chapter provides interaction with ABC national and chapter staff, member contractors, faculty and staff, and students with similar interests and career goals.
About ABC: Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 69 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.
The End of an Era: The FTC Proposal to Ban Noncompete Agreements
In a stunning proposal, the Federal Trade Commission (FTC) has proffered a universal ban on noncompete agreements. This proposal, albeit a considerable step away from the norm, was not necessarily unpredictable. Most recently, the FTC made a preliminary finding that noncompete agreements constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” If this proposal is enacted, it would have sweeping consequences in Massachusetts.
What is a Noncompete Agreement?
A noncompete agreement is precisely as it sounds. A noncompete agreement or noncompete clause is a contractual agreement or provision between an employer and a worker that bars the worker from working for a competing employer or starting a competing business. Noncompete agreements are typically within a certain geographic area and for a limited period of time after the worker’s employment ends.
Noncompete agreements have long been a source of controversy. Noncompete agreements tend to be a reliable scapegoat for stagnating pay of middle-income workers, preventing such workers from switching jobs to secure a raise.
However, noncompete agreements are not necessarily perceived as all bad. Noncompete agreements protect established companies by limiting competition within industries to allow those companies to thrive and protect the products it sells to consumers.
Scope of the Proposal
The scope of the FTC’s proposal is quite expansive. Applicable to both employees and independent contractors, the FTC would require employers to withdraw existing noncompete agreements and to inform workers that they no longer apply. Likewise, employers would be precluded from entering into, attempting to enter into, and maintaining a noncompete agreement with a worker. Likewise, employers would not be able to imply that a worker is bound by a noncompete agreement when he or she is not.
For existing noncompete agreements, which cover a considerable portion of workers in the private sector, the proposal would require employers to affirmatively rescind existing noncompete agreements and notify workers that they are no longer subject to the agreement’s terms.
The proposed rule does provide for certain exceptions. If the proposed rule is enacted, an anticipated formidable exception is the sale-of-business exception for an owner, member, or partner who owns at least 25 percent of a business that is being sold. Specifically, the exemption also covers those who are “otherwise disposing of all of the person’s ownership interest in the business entity, or by a person who is selling all or substantially all of a business entity’s operating assets, when the person restricted by the non-compete clause is a substantial owner of, or substantial member or substantial partner in, the business entity at the time the person enters into the non-compete clause.”
Massachusetts, which currently permits the use of noncompete agreements, may see a wave of new litigation should this proposal be enacted.
Next Steps in the FTC’s Proposal
The public will be allowed to submit comments on the proposal for 60 days, at which point the agency will move to make the proposal final. The rule would take effect 180 days after publication of the final version. This process, however, will not proceed without challenges. By way of example, the United States Chamber of Commerce has already threatened to sue the FTC over this ban.
Legal experts are forecasting for the proposal to be enacted in some form, although the scope of the enactment is difficult to predict. As such, it makes sense to assume that existing noncompete agreements will be affected by this proposal.
January Chairperson’s Message: Optimism Amid Stressful Times
It’s an honor to serve as chairperson of ABC Massachusetts for 2023, and to be the first woman to chair our chapter. It’s a particular honor to do so when five of the commonwealth’s six constitutional offices are held by women.
With a lingering pandemic, a new administration on Beacon Hill and the strange combination of an ongoing labor shortage and a slowing economy, these are certainly interesting times! Despite some of these stress-inducing realities, I remain optimistic. Part of the reason is because of all the progress we made last year under John Cruz’s kind and thoughtful leadership. We all owe him a debt of gratitude for his hard work.
We also thank Gov. Baker for support of construction and the emphasis he put on promoting vocational and technical careers. We now look forward to working with Governor Maura Healey to continue these important efforts to bring new talent into our industry.
One of the things we accomplished last year was executing on a construction diversity and apprenticeship expansion grant from the Executive Office of Labor and Workforce Development. The funding is aimed at attracting more diversity within our construction industry.
Part of the grant funded a diversity survey of ABC companies and their employees. In the first half of this year, we will produce a summary of the survey findings together with recommendations for how our member companies can expand the pool from which they draw talent by attracting a more diverse range of employees.
More good news comes in the form of a state skills capital grant of nearly $490,000 that was awarded to the Gould Construction Institute in December. The funding will allow Gould to purchase technology and equipment, including construction simulator learning systems, to update its Plumbing, HVAC, and Construction Craft Laborer industry certification training programs.
These are two of the three major state grants ABC or GCI has won in the last few years, and both will enhance our efforts to attract the new talent we need to bring into the construction industry.
Yet another reason for optimism is the initial success of Gould’s daytime electrical training pilot. You don’t need me to tell you how fast our industry is changing, and the old model of apprentices working all day, commuting to school and sitting in class for three hours may not be the recipe for addressing our labor shortage. The daytime model brings in students when they are fresh and more able to learn, and we plan to expand it to other trades.
Thank you again for allowing me to serve as your chairman, and here’s to a healthy and prosperous year ahead!
Nonresidential Construction Spending Increases 1% in November, Says ABC
WASHINGTON, Jan. 3—National nonresidential construction spending grew 0.9% in November, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $930.1 billion for the month.
Spending was up on a monthly basis in nine of the 16 nonresidential subcategories. Private nonresidential spending was up 1.7%, while public nonresidential construction spending was down 0.1% in November.
“The average nonresidential contractor starts 2023 with considerable backlog,” said ABC Chief Economist Anirban Basu. “Not coincidentally, contractors also have significant confidence regarding current year prospects, according to ABC’s Construction Confidence Index, which indicates expectations for growth in sales and employment with margins remaining stable.
“November’s construction spending report suggests that this confidence is warranted,” said Basu. “However, there are countervailing considerations. First, growth in nonresidential construction spending in November was not especially broad. Much of the growth came from the manufacturing category, which is partially attributable to construction related to large-scale chip manufacturing facilities. The balance of growth came mostly from conservation and development, which includes flood control expenditures. Were it not for those two categories, nonresidential construction spending would have been roughly flat in November.
“Second, backlog could dry up,” said Basu. “Anecdotal evidence suggests that banks are more cautious in their lending to the commercial real estate and multifamily segments. Fears of recession this year remain pervasive in an environment characterized by high and rising interest rates. It will be interesting to see how well backlog will hold up as contractors continue to build and the economy heads toward what is likely to be a Federal Reserve-induced recession.”
Know Your Contracts: Indemnity Clause Might Not Provide for Attorneys’ Fees
Although parties often attempt to collect attorneys’ fees through indemnity clauses, courts have held that indemnity clauses do not typically permit the recovery of attorneys’ fees in disputes between two contracting parties. The so-called “American Rule” generally prohibits one party from obtaining attorneys’ fees from the other. This rule, however, does not apply when the parties agree otherwise and memorialize their intentions in their contracts. A properly drafted indemnity clause can, however, be used to recover attorneys’ fees even in non-third-party disputes but it is critical to understand the difference between a contract’s attorneys’ fees provision and the indemnification clause.
The typical indemnification clause provides that one party shall defend, indemnify, and hold harmless the other for certain claims. Massachusetts Courts have held this language “is customary in third-party indemnification provisions rather than fee-shifting positions between the parties.” Stated differently, if a third-party (that is, not one of the parties to the contract) makes a claim or files suit against Party A and seeks to recover those damages against Party A, then the contract’s indemnity provision might permit Party A to recover its attorneys’ fees from the other party to its contract (i.e., Party B). If, however, the dispute is only between the two parties to the contract (that is, a dispute between Party A and Party B), then their contract’s indemnity clause likely will not permit the recovery of attorneys’ fees by either against the other absent express language to the contrary.
To extend the collection of attorneys’ fees to disputes involving only the two parties to a contract, the contract should include express language providing for the same. For example, the parties could include language stating the indemnity provision is intended as a “fee-shifting clause”. Alternatively, the parties could state attorneys’ fees are recoverable between the parties, regardless of whether a third-party claim is involved.
In summary, unless an indemnity clause expressly includes fee-shifting language, it likely will not permit the recovery of attorneys’ fees except for third-party claims. The better approach is to clearly and expressly set forth in your contract that attorneys’ fees will be provided in the event of a dispute with the counter party to your contract.
Employment Increases by 20,000 in November, Says ABC
WASHINGTON, Dec. 2—The construction industry added 20,000 jobs on net in November, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has risen by 248,000 jobs, an increase of 3.3%.
Nonresidential construction employment increased by 16,300 positions on net, with growth registered in all three subcategories. Nonresidential building added 8,200 net new jobs, while heavy and civil engineering and nonresidential specialty trade added 5,300 and 2,800 jobs, respectively.
The construction unemployment rate fell to 3.9% in November, while unemployment across all industries remained unchanged at 3.7%.
“Today’s employment report will be celebrated by many, including jobseekers and other labor market participants,” said ABC Chief Economist Anirban Basu. “Despite some recent high-profile layoffs, employers continue to hire aggressively and are increasing compensation in an effort to retain employees in the context of the ‘great resignation.’
“Normally, such dynamics would be celebrated by all,” said Basu. “However, for those who want inflation to abate, interest rates to fall and markets to be less volatile, the November jobs report is rather bad news. Those operating in real estate and construction are likely to be discouraged, as these segments are heavily influenced by interest rates, and rising borrowing costs make it more difficult to finance the next generation of construction projects.
“Moreover, while some will claim that this jobs report makes it less likely that recession is coming next year, the reality is quite the opposite,” said Basu. “The Federal Reserve will be forced to push interest rates higher for longer, and that makes a downturn more probable over the next 12 months.”
Daytime Electrical Program Launched, Progress on Diversity
My first thought about this final chairman’s message was “Has it really been a year already?” Thankfully, when I reflected more, I realized just how much has gone on in that time.
Given the pace of change in construction, activity is one of the few constants. That change extends to how we train those who are entering our industry. This year the Gould Construction Institute piloted a daytime electrical training program. Finding enough qualified workers to meet demand is one of our biggest challenges. To address it, we must make careers in construction appealing to young people, and the fact is that they would much rather train during the day when they’re fresh than work all day and then commute to a couple of hours of schooling, which is a recipe for very little family time. We hope our next step will be to extend the daytime pilot to sheet metal.
Late last year our chapter was awarded a Construction Diversity and Apprenticeship Expansion Grant by the Massachusetts Executive Office of Labor and Workforce Development. Part of this grant funded the internal diversity study of ABC MA membership. I’m proud the survey found that members have taken active steps to promote diversity, equity, and inclusion within their companies.
A final report will be issued next year. Our goal is to use the survey results to equip members with the data and resources they need to become more diverse, equitable, and inclusive and understand their organization’s diversity dynamics. This will promote workforce development by helping the companies attract and retain diverse talent, allow them to meet and exceed workforce participation goals, and provide methods for creating a more inclusive workplace.
Just last month, I was pleased to see a large turnout at out local Craft Championships at Medford Vocational Technical School. Electrical winner Nick Palmer of Nardone Electrical Corp and Pipefitting winner Patrick Walsh of DECCO, Inc. will move on to the national championships at the ABC National Conference in Kissimmee, FL in March. It’s critical that we recognize the excellence of tomorrow’s industry leaders.
The coming year will no doubt be at least as hectic as this one has been, and I’m pleased that someone as capable as Vera Vadeboncoeur will be taking the reins. I hope everyone has a wonderful holiday season. It’s been an honor to serve as your chairman during the past year.