DUNLEVEY, MAHAN & FURRY MIDWEST ROOFING CONTRACTORS ASSOCIATION October 2009

1. DUNLEVEY, MAHAN & FURRYMIDWEST ROOFING CONTRACTORS ASSOCIATIONOctober 2009

2. PROVISIONS INCORPORATING OTHER DOCUMENTS • While it is not unusual for a subcontract agreement to incorporate other documents, most subs do not familiarize themselves adequately with those provisions, and, thus, they are not aware as to what they have agreed • Extraneous documents incorporated by reference can be problematic because the documents may be in conflict with each other and with the subcontract agreement

3. * • Look to see if the subcontract agreement has a provision that sets forth which document controls in the event of a conflict between them. If there is no such provision, one should be added to the subcontract agreement providing that in the event of such a conflict, the subcontract agreement controls

4. PROVISIONS INCORPORATING OTHER DOCUMENTS •Typically, subcontract agreements incorporate by reference extraneous documents such as: • the prime contract • specifications • general conditions • bid documents • special conditions • addenda thereto • others

5. ASSUMING TO GC HIS DUTIES TO OWNER • Subcontract agreements typically provide that the sub is assuming all obligations to the general that the general owes to the owner with respect to the subcontracted work • These are very sweeping provisions, but are not uncommon * • Again, a sub should be sure what duties it is assuming

6. PRIOR INSPECTION PROVISIONS • Subcontract agreements sometimes contain provisions requiring the sub to have, prior to performing any work, thoroughly visited and inspected the site to determine any problems with the plans and specs, or to discover the exact condition of the site • This is an attempt to avoid having to pay the sub for “differing site conditions”

7. * •If you cannot delete such a provision, it should at least be softened by adding the concept that the sub shall provide notice of any error within a reasonable time after the sub discovers them, regardless of whether the sub has yet begun work

8. UNREASONABLE INDEMNIFICATION PROVISIONS * • Be careful of overly-broad indemnity provisions •It is reasonable for the sub to indemnify the general for matters arising out of the sub’s work or fault

9. •It is also reasonable for the sub to indemnify the general for anything arising from the work of others who the sub supervises (i.e. sub’s Employees or sub-subcontractors) *• It is not reasonable for the sub to agree to indemnify the general for the negligence of somebody else, especially for the general’s own negligence

10. UNREASONABLE INDEMNIFICATION PROVISIONS •Indemnification provision may expressly state that sub will indemnify general for something caused by general’s or owner’s own negligence •Or, may be written so broad as to include things caused by general’s or owner’s own negligence

11. UNREASONABLE INDEMNIFICATION PROVISIONS •Any indemnification provision which would have a sub indemnify the general for the general’s own negligence should be rewritten and/or deleted •Whatever indemnity the sub is providing the general, the general should provide a reciprocal indemnity to the sub •The general should indemnify the sub for anything arising out of the work or actions of the general

12. “NO LIEN” PROVISIONS •Beware of provisions which would have a sub, before performing any work, forever waive any right to file or perfect a mechanic’s lien *•Some states have statutes which expressly state that such a provision is unenforceable. Ohio does not *•Therefore, if a sub encounters such a provision, it should be deleted

13. “NO LIEN” PROVISIONS •Missouri statute (429.005) says such a provision is against public policy and unenforceable •Kansas statute (16-1803(b)(2)) says such a provision is against public policy and is void and unenforceable

14. SCHEDULING PROVISIONS • Beware of provisions which provide the general with sole control over scheduling of your work • If the sub’s work is much more costly to perform in winter weather, then such provision is even more dangerous

15. • Ideally, the schedule would be attached to the agreement or otherwise agreed upon at the beginning, and changes would not be made without the sub’s consent or without the sub being able to obtain extra compensation for delay or more difficult performance

16. “NO DAMAGES FOR DELAY” CLAUSES •State that in the event of a delay in the sub’s work, the sub will not be entitled to extra compensation - but, perhaps, will be entitled to an extension of time *•Some states have a statute which provides that such a “no damage for delay” clause is unenforceable when the owner or general causes the delay – CAUTION! Can be enforceable for other delays

17. SUMMIT CONTRACTORS OSHRC – Struck down multi-employer policy in 2008. Eighth Circuit – Reversed OSHRC and sent case back to them 4/2009. OSHRC – Adopted Eighth Circuit decision 7/27/09

18. Contract language may be important • Presence of general contractor on site may be important • Understand your responsibility to the employees of others on job site under your contract. • May be able to limit exposure through contract language.

19. OSHA FIELD OPERATIONS MANUAL (FOM) New manual effective 3/26/09. Some significant changes. State OSHA citation may NOT any longer be used as the basis for a federal repeat. (Caution) But, it may be used to document employer knowledge to support a willful citation.

20. FOM (continued) Employee complaint includes only present employees, not past employees. Complaint by telephone is treated as a non-formal complaint until a signed copy of information is received.

21. FOM (continued)GENERAL DUTY CLAUSE • Employer fails to keep workplace free from hazard; • Hazard was recognized; • Causing or likely to cause death or serious physical harm; and • Feasible and useful method available to correct hazard. • Involved only cited employer’s employees.

22. FOM (continued)GENERAL DUTY CLAUSE (continued) Recognition of hazard can be based on • Employer recognition • Industry recognition • “Common sense” recognition Employer recognition • Statements made by employer, management, or supervisory personnel during or before inspection • E-mails

23. PROTECTING AMERICA’S WORKERS ACT H.R. 2067 – Will amend OSHA to expand coverage, increase protections for whistle blowers and to increase penalties for certain violations. 4/23/09 – Introduced and referred to House Committee on Education & Labor.

24. H.R. 242 – Directs SOL to revise regulations concerning the recording and reporting of injuries and illnesses. 3/16/09 – Referred to Subcommittee on Workforce Protections.

25. H.R. 849 – Directs SOL to issue interim and final combustible dust standards. 3/23/09 – (same as H.R. 242)

26. H.R. 2199 – Amend Act to authorize SOL to prevent employee exposure to imminent danger. 4/30/09 – House Committee on Education & Labor.

27. IMMINENT DANGER ACT If inspector determines imminent danger, employer must correct immediately (reasonably could cause death or serious physical harm.) (Could be just about anything.) Employer must take immediate action to remove all exposed employees and correct.

28. Employer refuses to comply, inspector can shut down job and remove employees. Failure to comply additional civil penalty of $10,000 - $50,000 a day. OSHA can obtain injunction in Federal District Court.

29. OSHA BUDGET PROPOSAL – FY 2010 $50.1 million over FY 2009 – 160 new CSHOs. Emphasis on enforcement and new regs, less on VPP, alliances, and compliance assistance. Increase in whistleblower and discrimination investigators.

30. PROTECTING AMERICA’S WORKERS ACT Introduced in Senate on August 7, 2009 Sponsor – Ted Kennedy Similar to legislation introduced in House on April 23, 2009 S.B. 1580

31. KEY COMPONENTS • Increases whistleblower protection • Redefines imminent danger refusal to work • Employee has 180 days to file complaint • Remedy injunctive relief, reinstatement, compensatory damages, civil penalties

32. For reporting purposes a serious accident is one in which two (2) or more employees are hospitalized. • Victims rights • Any employee who sustains an injury that is subject of OSHA investigation or family of deceased employee. • May – • meet with A.D. regarding inspection

33. receive a copy of citation • before citation is modified in the case of a serious incident or death – appear before parties and make a statement.

34. Employee rep may now file a notice within contest period that citation fails to properly designate violation as serious, willful, or repeated; that proposed penalty is not adequate or concerning abatement period. • Affected employees may now challenge any settlement agreement and may have a hearing on challenge.

35. PENALTIES - CIVIL Willful $8000 — $120,000 Willful (death) $50,000 — $250,000 Willful $25,000 — $250,000 (death <25 employees) Serious $0 — $12,000 Serious (death) $20,000 — $50,000 Serious $10,000 — $50,000 (death <25 employees)

36. Other than serious — same as serious Failure to Abate — up to $12,000/day Violation of posting requirement — $0 - $12,000

37. PENALTIES - CRIMINAL Willful (death) -- fines as set out for civil penalties + imprisonment up to 10 yrs. Willful (serious injury) – fines as set out for civil penalties + imprisonment up to 5 yrs. Employer includes any responsible corporate officer Advance notice of inspection – imprisonment up to 2 yrs.

38. False statements – imprisonment up to 5 yrs. Serious bodily injury – injury involving substantial risk of death, protracted unconsciousness, protracted and obvious physical disfigurement, or protracted loss or impairment of the function of a bodily member, organ, or mental faculty.

39. EMPLOYEE FREE CHOICE ACT • Biggest change since 1935 • Current rule: • Submit signed cards for 30% of employees to trigger secret ballot election • Good-faith bargaining between union and employer • Employees vote to ratify CBA

40. EMPLOYEE FREE CHOICE ACT • New rule: • Submit signed cards for a majority of employees, no secret ballot election • Secret ballot election still occurs if union submits signed cards for between 30% and 50% of employees • It is all about the Card

41. EMPLOYEE FREE CHOICE ACTCURRENT STATUS S. 560 3/10/09 – Read twice and referred to Committee on Health, Education, Labor & Pensions H.R. 1409 3/10/09 – Referred to House Committee on Education & Labor. 4/29/09 – Referred to Subcommittee on Health, Employment, Labor & Pensions.

42. RESPECT ACT (Re-Empowerment of Skilled and Professional Employees and Construction Trade Workers Act) • Current definition of supervisor in Section 2(11) of NLRA: an employee with authority to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward or discipline other employees or to responsibly direct them or to adjust their grievances or effectively to recommend such action • New definition: eliminates assigning and responsibly directing and requires supervisors to perform duties for a majority of work time

43. RESPECT ACT • Divides supervisor loyalty between company and union • Unions will use “non-supervisors” under new definition to collect union authorization cards • RESPECT shows union willingness to change any rule • More union members = more union money (Not yet introduced.)

44. PATRIOT EMPLOYER ACT • Tax credit if meet definition of Patriot Employer – 1% of taxable income • Patriot Employer definition: • Maintain ratio of full-time workers in U.S. to full-time workers outside U.S. • Maintain corporate headquarters in U.S. • Pay hourly wages sufficient to keep a family of 3 out of poverty

45. PATRIOT EMPLOYER ACT Patriot Employer definition (continued): • Pay difference between an employee’s salary and military salary and continue the health insurance for all National Guard and Reserve employees called for active duty • Pay 60% of each employee’s health care premiums

46. Provide employees with defined benefit retirement plan or a defined contribution retirement plan that matches 5% of employee contribution • Maintain neutrality in employee organizing campaigns

47. PATRIOT EMPLOYER ACT • Definitions are vague • Results in lower tax rate for large companies willing to unionize • Neutrality = union wins

48. PATRIOT EMPLOYERS ACTCURRENT STATUS S. 829 4/20/09 – Read twice and referred to Senate Committee on Finance H.R. 989 2/11/09 – Referred to House Committee on Ways & Means

49. FEDERAL HEALTHY FAMILIES ACT • 7 paid sick days per year • Time off for self, spouse, children, and parents for medical and preventive healthcare • Small employers – 15 employees • Incremental leave time • High “curb appeal” • Obama supports and mentioned at Democratic convention

50. HEALTHY FAMILIES ACTCURRENT STATUS S. 1152 5/21/09 – Read twice and referred to Committee on Health, Education, Labor & Pensions