Monthly Archives: April 2017

Give Us a Break…Literally: Senate Bill Considers Mandatory Breaks for Construction Workers

It’s 2:00 pm on a sunny Friday in Houston, Texas. The temperature is 102 degrees with humidity thick enough to make you question why you elected to spend your summer in the city. You stop at a light downtown and see 20 or more guys in long sleeve shirts working diligently on a construction project. You think to yourself, “My goodness, how can they work out in that heat all day?”

Well, a Texas Senate Panel is considering taking an action that it believes will make those jobs safer for workers. In an effort to prevent illness and deaths from the Texas heat, the panel considered Senate Bill 473 which proposes a requirement that construction companies to give workers mandatory rest breaks. The legislation would require 15-minute rest breaks for every four hours of work on construction sites.

Some cities in Texas have already implemented a similar policy on work sites. In Dallas, construction workers are entitled to a 10-minute break every four hours. Austin is another Texas city that requires breaks. There are also a handful of states that require breaks at construction sites.

The Debate

There is a debate among builders and worker advocates regarding the bill. Builders argue that safety regulations regarding construction work sites should be left to OSHA. OSHA has safety guidelines that are recommended to builders. Builder advocates explain that failure to follow OSHA recommendations can result in fines and is typically strong evidence of negligence in workplace safety litigation which could result in big verdicts against companies. They believe that the threat of litigation and fines are strong enough incentives to push companies to provide a safe work site.  They also believe that the bill could result in over-regulation because the federal government already regulates safety through OSHA and cities could pass similar legislation. Compliance with all three regulations could increase construction costs which would be passed down to the buyer.

Construction worker advocates point out that OSHA does not have a specific heat stress standard. OSHA relies on Section 5(a)(1) of the Occupational Safety and Health Act of 1970 (OSH Act) (also known as the General Duty Clause) to require employers to provide a safe and healthy environment for all workers and recommends that employers, including roofing employers, implement policies to address working during hot weather conditions. OSHA uses a heat index to make suggestions to builders on what to do when the heat reaches certain temperatures. Proponents of the bill argue that companies are not required to follow OSHA’s suggestions and many do not.

Senate Bill 473 would do much more than suggest breaks. Breaks would be mandatory and failure to comply will afford workers a right to file a complaint through the Texas Workforce Commission. The complaints would be investigated and handled by the Commission. Then, the commission could potentially penalize companies through the same process it uses for wage disputes.

There are a number of questions regarding the way this bill would impact the industry. From a legal standpoint one can expect that if passed, the bill will have a significant impact on construction contracts. Specifically, delay and delay damages clauses could be affected. Project timelines could also be impacted.

Nothing in this article is to be considered legal advice. If you have questions or need representation due to nonpayment on a construction project , please call 832-930-0529 or email us at info@stephensbell.com

When Dreams Turn to Nightmares: Why You Should Never Bet The Business On A Single Project

It’s the kind of project a Texas contractor would love to be involved in. There’s a huge plant going up. The project is approved by all required government entities. The state governor endorses it and it appears to be backed by more money than the Dallas Cowboys! What’s not to love right? Well, unfortunately, all that glitters is not always gold and for a number of Texas companies, this dream project became a nightmare.

In 2011, Mossi & Ghisolfi Group, an Italian petrochemical company decided to bring a multibillion dollar plastic plant to Corpus Christi. The project started in 2013 and was supposed to be finished in 2016 but stalled due to non-payment issues. Now, over 40 mechanic’s liens worth more than 100 million dollars have been field on the project and Texas contractors are suffering.

As is the case in many of these situations, contractors cannot make payroll due to the fact that they scaled up their workforce for the project. Some are on the brink of going under due to the situation. For others the lack of cash flows has required them to turn down other work and they are forced to due small jobs to survive.

In looking at these situations, the question that we are typically asked is whether this situation is preventable and the unfortunate answer, is probably not. On a project this large, everything normally checks out during due diligence and contractors feel secure doing the project. Also, because the project is so large, it is unlikely that an owner or General Contractor will be willing to issue a lump sum payment. Progression invoices and payment applications (pay apps) are the standard in these situations.

The only silver lining is that with such a big company, solvency should not be an issue. If the liens are properly perfected and the contractor has good representation, they should eventually be able to collect payment. The challenge for the contractors will be in finding enough liquidity to afford to hire counsel and wait out the litigation.

It is not uncommon in these situations for a large non-paying entity to contest the quality of the work done by the contractor and use this as a reason to reduce the total amount owed. This is also grounds for the lien to be contested and litigated. A typical strategy is to try and drain the cash strapped contractor until it taps out by accepting a fraction of their original invoice in exchange for a lien release.

When this happens, it is important that the contractors stand behind the quality of their work and if necessary foreclose on their liens if they want to be paid in full. This is also why it is good practice for contractors to keep a pool of retained earnings and allocate a portion of the budget to dispute resolution.

Nothing in this article is to be considered legal advice. If you have questions or need representation due to nonpayment on a construction project , please call 832-930-0529 or email us at info@stephensbell.com

The Buck Stops Here: Buc-ees vs. Bucky’s

Drive down any Texas interstate long enough and you’ll run into Buc-ees. It is a Texas staple and many Texans’ favorite chain of convenience store. What most Texans don’t know is that there is a war brewing due to the arrival of Bucky’s, a Nebraska based chain of convenience stores.

Further complicating matters is the fact that the two companies have bumped heads in the past. Both companies sought trademark protection for their brands only a few months apart. In 2009, they entered into a consent agreement allowing them to both continue using their names due to the fact there was such a great distance between them.

However, Bucky’s has recently decided to play hardball and has already taken steps to bring six of its stores to Texas. Naturally, Buc-ees has filed suit to prevent their competitor from being able to operate in Texas. Buc-ees suit alleges that Bucky’s looking to confuse the market and asserts claims of trademark infringement and unfair competition.

Unfair Competition

What exactly is “unfair competition”?  In all competitive situations there is some degree of unfairness. However, what makes unfair competition a cause of action is that it is categorized as arising out of business conduct which is contrary to honest practices in industrial or commercial matters. U.S. Sporting Prods., Inc. v. Johnny Stewart Game Calls, Inc., 865 S.W.2d 214, 217 (Tex. App.–Waco 1993, writ denied) (quoting Am. Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494 F.2d 3, 14 (5th Cir. 1974)). This includes

1) passing off or palming off;

2) trade secret misappropriation, and

3) common law misappropriation. Id.;

Conceal City, L.L.C. v. Looper Law Enforcement, LLC, 917 F.Supp.2d 611, 618 (N.D. Tex. 2013); see also Taylor Pub. Co. v. Jostens, Inc., 216 F.3d 465, 486 (5th Cir. 2000).

Obviously, Buc-ees will argue that if allowed to operate in Texas, Bucky’s will receive the benefit of 35 years of undeserved brand recognition. They’ll also probably assert that certain Bucky’s goods are going to be “passed off” as Buc-ees goods.