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The Biden administration continues to roll back Trump-era initiatives and institute new, pro-union policies that challenge ABC members’ ability to win work. ABC is fighting against these proposed rules and regulations affecting merit shop contractors and advocating for open competition and free enterprise.
The Biden administration’s costly and burdensome regulatory actions continue to harm American families and businesses by:
This adds up to $201.4 billion in regulatory costs and 276 million hours of paperwork over three years.
ABC’s Regulatory Roundup is updated on a regular basis and includes information about federal regulations, guidance and compliance materials from the U.S. Department of Labor, U.S. Department of the Treasury, Federal Acquisition Regulation Council, National Labor Relations Board, Federal Trade Commission, Environmental Protection Agency and Council on Environmental Quality.
Read ABC’s July Regulatory Roundup to learn more about the latest developments affecting the construction industry.
On July 3, ABC submitted comments in response to the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency proposed rule on Cyber Incident Reporting for Critical Infrastructure Act Reporting Requirements. The rule imposes new cyberincident 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. Many construction contractors are likely to be covered by the proposed rule. 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.
ABC’s comments, while recognizing the government’s vital need to protect critical infrastructure from cybersecurity threats, urged CISA to improve the rule by addressing key concerns including:
More information on the rule is available on CISA’s website and ABC’s previous Newsline article.
ABC has provided resources and webinars on new cybersecurity requirements affecting the construction industry at abc.org/cybersecurity.
This year’s Camp NAIWC, sponsored by the National Association of Women in Construction’s Greater Washington, D.C., chapter, was held in June. The camp is a four-day, all-girls camp offering students in grades 7 through 12 experience in trades such as carpentry, plumbing, electrical and more. ABC arranged a jobsite tour with ABC member Hensel Phelps on their National Institutes of Health jobsite in Bethesda, Maryland. ABC member Shapiro and Duncan also provided a trade demonstration. Finally, DEWALT, sponsor of ABC’s National Student Chapter Network and 2024 Safety Performance Report, donated PPE, including hard hats, gloves and glasses, to the participants for their jobsite tour.
On July 19, the National Labor Relations Board moved to withdraw its appeal of the U.S. District Court for the Eastern District of Texas’ decision to vacate the 2023 Joint Employer final rule, which means the court’s favorable decision will become final. The Board appealed the decision on May 7.
On March 8, the district court vacated the 2023 final rule. Under the court’s decision, the ABC-supported 2020 Joint Employer Final Rule, which provides clear criteria for companies to apply when determining their joint employer status, remains in effect today.
ABC issued a release stating, “We are pleased the Board decided to withdraw its appeal of the court’s decision and that the court’s ruling to block the NLRB’s radical and overbroad joint employer standard is now final,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “The 2023 final rule would have disrupted long-established, efficient operational processes that are followed by construction service providers who work together to build America. And it clearly would have had a harmful effect on a significant segment of the construction industry: small businesses.
“Because the ABC-supported 2020 final rule remains in effect, contractors will be better able to work and coordinate with multiple employers without fear of being unexpectedly and unfairly found to be joint employers,” said Brubeck.
On Nov. 9, 2023, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s final rule for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act.
ABC National staff and an ABC member testified at the June 27, 2024, U.S. House Oversight and Accountability Committee’s subcommittee hearing on President Biden’s controversial policies promoting and mandating anti-competitive and inflationary project labor agreements on federal and federally assisted projects.
The hearing, “Cutting Competition in Contracting: The Administration’s Pricey Project Labor Agreement Mandate”—held by the Subcommittee on Cybersecurity, Information Technology, and Government Innovation—gave ABC an important platform to shed light on the Biden administration’s controversial pro-PLA policies.
Ben Brubeck, ABC vice president of regulatory, labor and state affairs, provided written testimony and opening remarks attacking the Biden administration’s pro-PLA policies.
The opening statement and written testimony of Aric Dreher of Cianbro––an ABC member contractor headquartered in Pittsfield, Maine, building federal and federally assisted construction projects––described how Biden PLA policies injure Cianbro and other merit shop general contractors and subcontractors by reducing competition and harming the merit shop workforce. Cianbro signed an affidavit in support of ABC’s ongoing federal lawsuit in Jacksonville, Florida, against the Biden rule requiring PLAs on federal construction contracts of $35 million or more.
Check out this hearing recap for links to key video moments of the hearing.
ABC continues to fight for fair and open competition on taxpayer-funded construction projects. Find more information at the ABC-led federal coalition website, BuildAmericaLocal.com, and get details on the Biden administration’s PLA mandate policy on federal construction projects at abc.org/BidenPLAFAQs.
On June 28, 2024, the U.S. District Court for the Eastern District of Texas issued a decision in the Texas attorney general’s case challenging the U.S. Department of Labor’s final rule on Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The judge in the case issued a limited preliminary injunction blocking implementation of the rule for employees of the state of Texas only.
For the rest of the employer community in Texas and throughout the nation, the rule went into effect on July 1. The minimum salary threshold for exemption increased to $43,888, and the threshold for highly compensated employees increased to $132,964.
In the second phase of the DOL’s final rule, on Jan. 1, 2025, the minimum annual salary level threshold for exemption increases to $58,656 and the threshold for highly compensated employees increases to $151,164. Salary thresholds will then be automatically updated every three years, regardless of economic circumstances. ABC issued a news release opposing the rule, which was issued on April 23.
Overtime resources from the DOL:
For more information, read Littler Mendelson’s analysis of the overtime final rule and watch ABC’s webinar, “Learn About the DOL’s New Overtime Rule in 30 Minutes.”
On May 22, ABC joined a coalition of business groups in filing a complaint in the U.S. District Court for the Eastern District of Texas, Sherman Division, challenging the DOL’s overtime rule. Read ABC’s news release announcing the lawsuit and learn more about the pending overtime lawsuits. ABC will continue to provide updates on any new developments regarding the pending legal challenges.
Virtually all of ABC’s members employ workers who qualify for exempt status, and like the unlawful 2016 overtime rule, the DOL’s 2024 rule will reclassify a substantial amount of ABC member employees who currently qualify for exempt status as nonexempt. This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities.
In addition, the 2024 rule’s radical increase in the salary threshold for exemption will further complicate the current economic outlook. Multiple industries, like construction, are grappling with uncertain economic conditions such as inflation, supply chain disruptions, high materials prices and workforce shortages, all of which push operational costs ever higher. Specifically, ABC estimates that the construction industry must hire more than half a million additional workers in 2024 to meet demand. The rule’s triennial automatic indexing provision will exacerbate the harmful impact on businesses and add to rampant inflation that is already harming the economy.
On Nov. 7, 2023, ABC submitted comments to the DOL in response to the proposed rulemaking, calling on the DOL to withdraw it. ABC also signed onto coalition comments criticizing the overtime proposed rule, joining 244 national, state and local organizations representing employers from a wide range of private industry and public, nonprofit and education sectors.
On July 3, the U.S. District Court for the Northern District of Texas issued a limited preliminary injunction and stay of the Federal Trade Commission’s noncompete final rule, holding that the FTC exceeded its statutory authority and violated the Administrative Procedure Act. The Court limited the scope of the injunctive relief to named plaintiff Ryan LLC and plaintiff-intervenors the Chamber of Commerce of the United States of America; the Business Roundtable; the Texas Association of Business; and the Longview Chamber of Commerce.
“For any employer that was not a plaintiff or plaintiff-intervenor in the action, the noncompete rule is still set to take effect on Sept. 4, 2024, although the court’s opinion clearly casts doubt on the long-term viability of the noncompete rule,” said ABC general counsel Littler Mendelson’s analysis.
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.
ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property.
Background
On April 23, the Federal Trade Commission voted 3-2 to issue its final rule to ban noncompete clauses.
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.
On June 28, the U.S. Supreme Court overruled Chevron, USA Inc. v. Natural Resources Defense Council. ABC’s general counsel, Littler Mendelson, provided an analysis of the decision:
“Chevron often required courts to defer to federal agencies when those agencies were interpreting statutes they administer. Because of [the June 28] decision, courts will no longer defer. Instead, they will give statutes their ‘best’ interpretation. That means agencies—including labor and employment agencies—will have less leeway to write broad rules. They will instead have to write rules that hew more closely to statutory language. They may also have to defend some existing rules against closer scrutiny in court. And that closer scrutiny could upset some recently adopted or proposed rules, such as rules on overtime, safety inspections, and independent contracting.”
The ABC-led Coalition for a Democratic Workplace issued a statement on the decision:
“The Supreme Court has rightly recognized that Chevron deference gave too much authority to federal agencies. Agencies like the National Labor Relations Board have taken advantage of this decision to interpret their statutes in radical, expansive ways never intended by Congress. Chevron also allowed the Board to engage in incessant flip-flopping on issues with each change of administration, leading to unmanageable uncertainty for the employer community.
“The Court’s new decision will result in more reasonable policies from the executive branch. The judicial system will finally have the ability and responsibility to rein in overreaching agencies like the NLRB to protect the regulated community.”
The U.S. Department of Labor’s Occupational Safety and Health Administration recently issued its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed rule. OSHA’s proposed rule would apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime and agriculture sectors where OSHA has jurisdiction and require employers to develop programs and implement controls to protect employees from heat hazards. Read ABC’s release on the proposed rule.
Elements of the proposal include the following:
OSHA is giving the public 120 days to submit written comments on the proposal after publication in the Federal Register, which will likely occur in the next couple of weeks.
OSHA resources on the proposed rule:
Background:
On Oct. 27, 2021, OSHA issued an Advance Notice of Proposed Rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings, which requested information on how to implement regulations to protect workers from hazardous heat. ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments in response to the ANPRM on Jan. 26, 2022.
On April 12, 2022, OSHA announced a National Emphasis Program on Outdoor and Indoor Heat-Related Hazards, which sets out a targeted enforcement effort and reiterates OSHA’s compliance assistance and outreach efforts.
On July 27, 2023, OSHA issued a heat hazard alert to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The department also announced that OSHA will intensify its enforcement where workers are exposed to heat hazards, with increased inspections in high-risk industries like construction and agriculture. These actions will fully implement the agency’s National Emphasis Program on heat, announced in April 2022, to focus enforcement efforts in geographic areas and industries with the most vulnerable workers. On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.
In December 2023, ABC submitted comments as a steering committee member of the Construction Industry Safety Coalition and the Coalition for Workplace Safety in response to OSHA’s potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings following its review of the Small Business Advocacy Review Panel materials and the SBAR Panel’s final report. In September, the SBAR Panel hosted six video conferences to gather input from small entity representatives. An ABC member participated as a SER during one of the video conferences. The panel’s final report was issued on Nov. 3.
ABC strongly supports worker safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Employers play a key role in providing training and awareness regarding heat protection, and ABC will continue to support members in ensuring preparedness for heat-related issues through a wide range of resources.
More than 400 construction and business leaders from across the country convened in Washington, D.C., June 25-26 for ABC Legislative Conference 2024.
Speaker of the U.S. House of Representatives Mike Johnson, R-La., Rep. Jim Jordan, R-Ohio, and Jesse Watters, host of Jesse Watters Primetime and co-host of The Five on FOX News, were among the speakers at the popular Legislative Update Breakfast on June 26. Luke Farley of ABC Carolinas member Ellis & Winters LLP, a member of ABC Carolinas, who is the Republican nominee for North Carolina labor commissioner, and Bernie Moreno, a candidate for U.S. Senate in Ohio, also addressed attendees.
Speaker Johnson thanked ABC members for their support dating back to his first run for political office. “You always remember the people who were with you from the beginning,” he said, adding that he believes help is on the way to combat the Biden administration’s efforts to weaponize the justice system and regulatory agencies.
Rep. Jim Jordan shared congressional efforts to fight for rational policies that benefit small business owners and ABC contractor members. “Thank you for what you’ve stood for, which are the right principles, like free enterprise,” said Jordan.
Jesse Watters provided members with a candid perspective on the upcoming presidential debate and 2024 elections. ABC National Chair of the Board of Directors Buddy Henley then presented Watters with the ABC Merit Champion Award as a tribute to his steadfast support of the merit shop.
After the breakfast, ABC contractor members and staff went to Capitol Hill for meetings with their federal lawmakers and staff, where they advocated for inclusive, win-win policies that create a level playing field to bid on taxpayer-funded infrastructure projects. These include the Fair and Open Competition Act; the Employee Rights Act; all-of-the-above workforce development strategies and a new market-driven visa program that addresses our legal immigration workforce needs and disincentivizes illegal immigration.
ABC members and staff also briefed lawmakers on the negative impacts of union-favoring government-mandated project labor agreements; the Inflation Reduction Act; the Protecting the Right to Organize Act; new, controversial apprenticeship requirements; and other burdensome regulations that will exacerbate the construction industry’s skilled labor shortage of more than half a million in 2024 and undermine taxpayer investments in infrastructure.
ABC members and staff met with dozens of lawmakers, including Reps. Sam Graves, R-Mo., Elise Stefanik, R-N.Y., Virginia Foxx, R-N.C., James Comer, R-Ky., and Adam Smith, D-Wash., as well as staff of Sens. John Fetterman and Bob Casey, Democrats of Pennsylvania and staff of Sen. Mark Kelly, D-Ariz.
Finally, the conference concluded with ABC’s Free Enterprise Alliance reception that hosted two U.S. Senate candidates: former Maryland governor Larry Hogan and Ohio businessman Bernie Moreno.