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On May 17, ABC joined an industry coalition in submitting comments to the White House’s Office of Management and Budget in response to the OMB’s request for information on public participation in federal agency policymaking. The OMB issued the request ahead of plans to develop a governmentwide framework, common guidelines and leading practices for public participation and community engagement.

In the comments, ABC calls on the OMB to ensure greater transparency in federal rulemaking across all agencies. Among other concerns, the comments urge the OMB to require agencies to properly engage with relevant trade associations, avoid making policy through supposedly nonbinding guidance documents, provide sufficient notice and comment periods for all rulemakings and prioritize the use of plain language in rulemakings to enhance accessibility for the general public.

On May 21, 20 states led by Iowa and North Dakota joined in a lawsuit against the Council on Environmental Quality, seeking to overturn the ABC-opposed National Environmental Policy Act Phase 2 revisions. The complaint asserts that the CEQ’s new regulations impose unnecessarily burdensome and unworkable new rules that will delay critical projects across the country.

The final rule, which takes effect July 1, implements wide-ranging changes to the federal environmental review and permitting process. The changes reverse important streamlining provisions from the ABC-supported 2020 NEPA rule and add new layers of complexity to the NEPA process.

ABC previously joined a coalition submitting comments opposing the rule, and issued a statement condemning the final rule upon its release.

On April 4, the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency issued a proposed rule on Cyber Incident Reporting for Critical Infrastructure Act Reporting Requirements. The rule, in alignment with the CIRCIA Act (signed into law as part of the Consolidated Appropriations Act of 2022), imposes new cyber incident and ransom payment reporting requirements for companies deemed to have responsibility for critical infrastructure.

Specifically, entities potentially covered by the rule fall under any of 16 critical infrastructure sectors. All construction contractors are likely to fall under one or more sectors, and would then be subject to the proposed rule’s requirements if they are either:

  • Not a small business, as defined by the Small Business Administration’s size standards; or,
  • Fall under sector-specific criteria outlined in the proposed rule. Under the Defense Industrial Base criterion, federal contractors already subject to U.S. Department of Defense cybersecurity reporting requirements would be covered.

The proposal would require that these covered entities report any substantial cyberincident within 72 hours, and any ransom payments made in response to a ransomware attack within 24 hours. A substantial cyber incident is defined as a cybersecurity breach resulting in one or more of the following:

  • Substantial loss of confidentiality, integrity or availability of the entity’s information system or network
  • Serious impact on the safety and resiliency of the entity’s operational systems and processes
  • Disruption of the entity’s ability to engage in business or industrial operations or deliver goods or services
  • Unauthorized access to the entity’s information system or network caused by a third-party data hosting provider or a supply chain compromise

The proposed rule also imposes new recordkeeping requirements related to cybersecurity. Companies that fail to fully comply with the rule would face subpoenas, and federal contractors could be subject to acquisition penalties, suspension and debarment.

More information on the rule is available on CISA’s website.

ABC will comment on the proposed regulations. The deadline for comments is July 3.

ABC has provided resources and webinars on new cybersecurity requirements affecting the construction industry at abc.org/cybersecurity.

ABC’s Massachusetts chapter and a coalition of merit shop contractors successfully blocked the Springfield Water and Sewer Commission’s plan for a project labor agreement mandate on a $325 million water filtration plant.

The project is expected to create as many as 500 jobs in all trades. The commission extended the deadline for general contractor to bid on the project by nine days, until June 13.  

“Notwithstanding the lip service the PLA pays to being open to all bidders, it most assuredly is not,” wrote Hampden Superior Court Judge Michael K. Callan in the decision to issue a preliminary injunction against the PLA. “The evidence before the court is that the PLA poses such a significant disadvantage to open shops as to render a competitive bid impossible. For all intents and purposes, the PLA excludes open shops from bidding, as it essentially requires bidders to execute an agreement to use union laborers on the Project.”

“This ruling makes it clear that PLAs discriminate against open shop contractors and reduce competitive bidding,” said ABC Massachusetts President Greg Beeman. "This is a great victory for open competition that benefits our members and the taxpaying public."

MassLive commended the decision in an editorial:

“Kudos to Hampden Superior Court Judge Michael K. Callan for dismantling the flimsy excuses used by the Springfield Water and Sewer Commission to justify using an anti-competitive ‘project labor agreement’ on its $256 million West Parish Water Treatment Plant upgrade.

“The commission’s own consultant, the engineering firm of Hazen and Sawyer, had provided a written report in November that adding a PLA to the project would increase the cost of roughly $15.5 million.

“Judge Callan found that this report had been ‘buried’ and that, instead, the commission board, which voted 2-1 in January to impose the PLA, had been influenced by ‘extensive lobbying efforts’ by union representatives.”

“It’s refreshing to see the legal system and the media see anti-competitive and costly government-mandated PLAs for what they really are,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “We are hopeful that the judge in ABC’s critical lawsuit against the Biden administration’s outrageous push for PLAs on all federal construction projects of $35 million or more will have a similar perspective and rule in favor of taxpayers and fair and open competition.”

ABC’s Lawsuit Against Biden’s Federal PLA Policy Progresses

ABC and its Florida First Coast chapter filed a lawsuit in federal court on March 28 to stop the Biden administration’s unlawful scheme to mandate project labor agreements on construction contracts procured by federal agencies. ABC’s complaint asserts that President Joe Biden lacks the legal and constitutional authority to impose a new federal regulation injuring economy and efficiency in federal contracting and illegally steering construction contracts to certain unionized contractors, which employ roughly 10% of the U.S. construction workforce.

“ABC has heard from large and small federal contractors—including firms signatory to union agreements—and concerned federal agency contracting officers that the Biden administration’s controversial PLA policy has already stifled competition and raised costs on federal construction contracts in Florida and across the country, said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a news release about the lawsuit.” This policy will continue to do so absent a successful legal challenge.”

On Friday, the U.S. Justice Department filed a brief in response to ABC’s April 26 motion for a preliminary injunction. A date for a hearing and oral arguments has not yet been set.

For more information on ABC’s campaign to push back on federal, state and local PLA mandates with other construction industry stakeholders, visit BuildAmericaLocal.com.

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

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

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

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

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

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

Background on the final rule:

On March 29, OSHA announced its Worker Walkaround Representative Designation Process final rule and ABC issued a news release opposing the rule.

OSHA Resources on the final rule:

On Nov. 13, 2023, ABC submitted comments urging the DOL to withdraw its Worker Walkaround Representative Designation Process proposed rule. ABC also signed on to comments submitted by the Coalition for Workplace Safety and Construction Industry Safety Coalition.

Continue to monitor Newsline for further updates on the lawsuit.

On May 14, ABC joined a broad group of trade associations in filing an amicus brief in support of plaintiffs’ request for injunctive relief against the Federal Trade Commission’s final rule to ban noncompete clauses. Injunctive relief is appropriate and necessary to avoid the immediate and irreparable harm the FTC’s final rule would impose on the hundreds of thousands of American businesses—like construction companies—that appropriately rely on narrowly tailored noncompetes.

"Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts around the country that are beneficial for both businesses and employees. ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. This new rule will have a harmful effect on their companies as well as their employees, forcing companies to rework their compensation and talent strategies."

Background:

On April 23, the Federal Trade Commission voted 3-2 to issue its final rule to ban noncompete clauses. The rule is effective Sept. 4, 2024.

According to the FTC, under the new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives can remain in force, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them.

ABC issued a news release opposing the rule:

“The final rule to ban all noncompete agreements nationwide—except existing noncompetes for senior executives—is a radical departure from hundreds of years of legal precedent,” said Ben Brubeck, ABC vice president of regulatory, legal and state affairs. “Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts—including construction project contracts—around the country that are beneficial for both businesses and employees.”

ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. This new rule will have a harmful effect on their companies as well as their employees, forcing companies to rework their compensation and talent strategies.

FTC Resources on the Final Rule:

To learn more about the final rule and what happens next, read ABC general counsel Littler Mendelson’s analysis.

In April 2023, ABC submitted comments in opposition to the FTC’s unprecedented proposal to ban noncompetes. ABC also joined the U.S. Chamber of Commerce and 280 business groups in submitting comments urging the FTC to rescind the proposed rule.

The final rule is currently being litigated. Continue to monitor Newsline for updates.

On May 13, ABC sent a letter to Rep. Jay Obernolte, R-Calif., and the U.S. House Energy and Commerce Committee’s Environment, Manufacturing, and Critical Materials Subcommittee, urging the committee to oppose the U.S. Environmental Protection Agency’s authorization of new California regulations on locomotive emissions.

The regulations, implemented by the California Air Resources Board, state that all locomotives in California must be zero-emission models by 2030. Under the Clean Air Act, the EPA must approve CARB’s regulations before they can be finalized, but the agency has yet to issue a final decision.

ABC’s letter, submitted in advance of a May 15 subcommittee hearing on the EPA’s budget with Administrator Michael Regan, outlines the enormous cost of compliance with this regulation and the potential for wide-ranging impacts on key aspects of the construction materials supply chain. The letter requested that the subcommittee strongly question Administrator Regan regarding the agency’s position on the ban.

ABC previously joined a coalition of industry stakeholders in comments to the EPA asking the agency to deny authorization of the ban.

ABC, as a member of the Partnership to Protect Workplace Opportunity, called upon the U.S. Department of Labor’s Wage and Hour Division to extend the implementation date of the first increase to the minimum salary threshold under its new final rule altering the overtime regulations under the Fair Labor Standards Act.

“WHD is providing the regulated community with only two months to analyze the rule, determine what changes to their operations and payrolls will be necessary, explain to the impacted workers how and why their pay, titles, or workplace responsibilities will change, and then implement those changes,” the letter states. “This is an arbitrary and burdensome timeline for the regulated community to meet, especially smaller businesses that do not have the resources to make such changes quickly.” PPWO is requesting that the WHD extend implementation from its current date of July 1, 2024, to at least Sept. 1, 2024. Read the PPWO’s statement about the letter.

The PPWO also created a grassroots toolkit to urge Congress to call for a delay in implementation of the first increase. The grassroots portal allows you to send a model letter directly to Congress educating them about the difficulties of the current effective date, but you can also edit the letter as you see fit. 

On April 23, the DOL issued its final rule on overtime, which will change overtime regulations under the Fair Labor Standards Act. The final rule increases the minimum annual salary level threshold for exemption in two phases: from the current level of $35,568 to $43,888 on July 1, 2024, and to $58,656 on Jan. 1, 2025. In addition, the threshold for highly compensated employees will be increase from the current threshold of $107,432 to $132,964 on July 1 and then to $151,164 on Jan. 1. Further, salary thresholds will update every three years starting on July 1, 2027. Learn more about the final rule and read ABC’s press release opposing it.

ABC members and chapter staff are encouraged to register for an ABC webinar on May 30 with Littler Mendelson Shareholder Jim Paretti to gain insight on the overtime final rule.

Both the U.S. Senate and U.S. House of Representatives held hearings in early May featuring testimony from U.S. Department of Labor Acting Secretary Julie Su, the sole witness at both events, to review the president’s Fiscal Year 2025 Budget Request for the Department of Labor and discuss the policies and priorities of the department.

Prior to the hearings, ABC sent letters to the committees expressing concern with the DOL’s actions under Acting Secretary Su's leadership. The letters detail the detrimental rulemakings issued by the DOL in the 2023 and 2024 fiscal years, specifically the overtime, worker walkaround, independent contractor, Davis-Bacon and national apprenticeship system rules.

On May 9, the U.S. Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies held a hearing to review the DOL’s Fiscal Year 2025 budget request with Acting Secretary Su.

During the hearing, Ranking Member Shelley Moore Capito, R-W.Va., expressed concern that the DOL’s priorities hurt workers and create red tape. She emphasized the DOL should focus on workforce training and creating new jobs rather than mandating new burdens that restrict worker choice and flexibility. She noted the independent contractor rule jeopardized 27 million Americans’ ability to work in a way that best fits their needs and schedules. In addition, she stated the overtime rule would force small businesses to absorb costs, which would likely lead to workers facing fewer hours, more restrictions and layoffs.

On May 1, 2024, the U.S. House Committee on Education and the Workforce held a hearing, “Examining the Policies and Priorities of the Department of Labor.” Prior to the hearing, ABC sent a letter to the committee expressing concern with the DOL’s actions under Su’s leadership.

In her opening statement, Committee Chair Virginia Foxx, R-N.C., expressed concern about the DOL’s rulemakings. Specifically, she stated that the Davis-Bacon rule would make federal construction projects more unaffordable, the overtime rule would force employers to cut hours, the independent contractor rule would bankrupt freelancers, and the apprenticeship rule would further handcuff employers. She emphasized that the Biden administration’s policies focused on serving the interests of big labor union bosses and were detrimental to American workers, job creators and taxpayers.

 Rep. Lloyd Smucker, R-Pa., expressed concern about the Davis-Bacon final rule’s impact on federal construction project costs and emphasized it abandons free market principles. He cited a nonpartisan Beacon Hill Institute study, which estimates Davis-Bacon’s methodology increases project costs by 7%. At a time when construction costs have risen dramatically due to inflation, Rep. Smucker asked if applying additional costs through project labor agreements was fair to taxpayers.

In addition, Rep. Smucker expressed concern about the DOL’s apprenticeship rule, stating that it would lead to less involvement in apprenticeship programs.

 

On April 23, the Federal Trade Commission voted 3-2 to issue its final rule to ban noncompete clauses.  The rule is effective Sept. 4, 2024.

According to the FTC, under the new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives can remain in force, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them.

ABC issued a news release opposing the rule:

“The final rule to ban all noncompete agreements nationwide—except existing noncompetes for senior executives—is a radical departure from hundreds of years of legal precedent,” said Ben Brubeck, ABC vice president of regulatory, legal and state affairs. “Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts—including construction project contracts—around the country that are beneficial for both businesses and employees.”

ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. This new rule will have a harmful effect on their companies as well as their employees, forcing companies to rework their compensation and talent strategies.

FTC Resources on the Final Rule:

To learn more about the final rule and what happens next, read ABC general counsel Littler Mendelson’s analysis.

In April 2023, ABC submitted comments in opposition to the FTC’s unprecedented proposal to ban noncompete agreements. ABC also joined the U.S. Chamber of Commerce and 280 business groups in submitting comments urging the FTC to rescind the proposed rule.

The final rule is currently being litigated. Continue to monitor Newsline for updates.

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