Vol. 23, No. 6
Inside this Edition: Troublesome Rensselaer School Bill Signed, Job Losses Drain UI Fund, President’s Message, Court Of Appeals Finds That Cable T.V. Technician Not Protected By Labor Law §240, Opposing Amicus Brief Filed On Contingent Payment Case, Calendar Of Events, December 9th Is NESCA’s Annual Toys For Tots Night, Welcome New Members, Member Anniversaries, OSHA Launches New Web Page For Residential Construction
Governor Pataki has signed legislation that will allow the City of Rensselaer to deviate from normal public bidding requirements for a new school building project. The Governor signed the bill, known as the Facility Alternatives for the Rensselaer City School Distict Act, on October 26th.
The legislation authorizes the school district to enter into a contract for a school building facility project that could be awarded either through the normal competitive bidding requirements (section 103 of the General Municipal Law), or based on an evaluation of proposals that could include the financing, design, construction and ownership of the project.
The bill waives the requirement for separate prime contracts (Wicks Law), but only if the school district agrees to enter into a project labor agreement (PLA) after establishing that it is “justified by the interests underlying the competitive bidding laws”. These interests include the possibility of cost savings, the impact of delay, labor peace through no strike – no lockout provisions, ensuring the supply of skilled workers for the duration of the project, and creating a process for resolving disputes.
The bill also mandates the payment of prevailing wages on all contracts as well as compliance with the minority and women-owned business goals under Article 15-A of the Executive Law.
Finally, the bill waives performance and payment bond requirements if the proposal selected does not put the school district at risk.
To summarize, this bill: waives competitive bidding requirements, waives separate contract requirements, mandates a project labor agreement and waives payment bond protection for subcontractors and suppliers if the school district is not at risk. It is disturbing the think that the Legislature and the Governor believe this will somehow result in a beneficial outcome for the Rensselaer School District.
JOB LOSSES DRAIN UI FUND (Go Top)
New York employers will pay an additional federal unemployment insurance tax of $21 per employee in January 2005 to replenish a fund drained by job losses during and after the last national recession.
The U.I. tax increase is mandated by federal law to repay monies advanced by the federal government to New York’ Unemployment Compensation Trust Fund during 2002, 2003 and 2004. The monies were automatically advanced by the federal government because New York’s unemployment benefit payout outpaced New York’s unemployment insurance tax payments since the onset of the 2001 economic downturn.
Since there are no monies in New York’s Unemployment Compensation Trust Fund for the state to pay back the federal government, the $21 federal tax rate increase is necessary.
NESCA Holiday Meeting & Reception
December 9, 2004 - Century House
6:00 p.m. – Cocktails Available for Three Hours
Champagne Station – Hors D’oeuvres
7:00 p.m. – Dinner – Entrée Duet
New York Strip Steak and Grilled Filet of Salmon
Toys For Tots Presentation with the
United States Marine Corps
Comedian/Impressionist Steve Van Zandt
Cost - $50
Spouses (significant others) Come For Free!
During the past month, NESCA held regional membership meetings in both the Mid-Hudson and Binghamton regions, where I had the pleasure of visiting with our members from those two areas. What some members may not know is that while NESCA is based in Albany, our chapter territory actually covers most of eastern New York from Plattsburgh to Newburgh and includes the Binghamton area. In fact, 26 percent of our membership is located in areas outside of the Capital District. These “distant” members make up an essential component of our association. While it is obviously more difficult for these members to attend events and functions held in Albany, their continued membership and support is absolutely crucial to our legislative efforts. They provide us with points of contact and access to key senators and assemblymen from their cities and towns, and they give our legislative program a big boost by personally lobbying their hometown legislators on issues important to subcontractors and suppliers. I applaud our members who are located in Plattsburgh, Glens Falls, Kingston, Poughkeepsie, Newburgh, Binghamton and other areas outside of Albany for recognizing the value of NESCA even if can’t attend our Albany events on a regular basis. I thank you for embracing NESCA’s purpose and for your support and assistance in advancing that purpose in the Legislature, the Courts and throughout the construction industry.
While I’m on the topic, I’d like to remind members whether you are within or outside of the Capital District to please recruit a new member for NESCA. Simply put, the more members we have, the stronger we are!
On November 11th, NESCA held an interesting, educational, and well-attended membership meeting which featured a presentation by Deb Miller on the new federal overtime provisions. Deb provided members with useful information about the circumstances under which an employee must be paid overtime and when an employee may be exempt from the overtime requirements. She explained that an exempt position must pass both the salary basis and job duties tests. For example, in order for an administrative employee to be exempt from overtime, that employee must be compensated at a rate not less then $455 per week. Further, that employee must be engaged in non-manual work on matters of significance related to the management or business operations of the company and which require the exercise of discretion and independent judgment. I wish all NESCA members had been able to hear Deb’s presentation because it was a real eye opener. I encourage members to review the compensation and job duties of all your employees to make sure you are in compliance with the regulations.
Finally, on December 9th, NESCA will hold its special holiday meeting and reception at the Century House. Instead of conducting our normal business, this meeting will be purely social in nature, and will feature a 3-hour open bar, fantastic hors d’oeuvres and a first-class dinner. After dinner, we’ll be entertained by comedian/impressionist Steve Van Zandt. I encourage members to bring your spouses to this meeting at no charge. Also, please remember to bring a toy with you for our Toys for Tots campaign in cooperation with the Marine Corps. The Marines will be represented at our meeting, and we’d like to be able to present them with lots of toys again this year. So mark your calendar for December 9th. I guarantee you’ll have a great time.
Kevin J. Garrity, President
COURT OF APPEALS FINDS THAT CABLE T.V. TECHNICIAN NOT PROTECTED BY LABOR LAW §240
The New York State Court of Appeals recently issued a decision in Abbatiello v Lancaster Studio Associates et al. (3 NY3d 46), which determined that a landlord was not liable under Labor Law § 240 (1) for an injury sustained by an unauthorized worker on its property. The plaintiff in this case was an employee of Paragon Cable who was dispatched to an apartment building owned by Lancaster Studio Associates in response to a customer’s complaint. The customer was not home, so plaintiff proceeded to examine the cable junction box which was bolted to an exterior wall about 20 feet above the ground. Upon climbing a ladder to inspect the junction box, plaintiff determined that the disruption to service was caused by water seepage. Before he could initiate any remedial action, however, the ladder bent and plaintiff was injured when he fell to the ground.
Plaintiff commenced an action against the owner of the building, Lancaster Studio Associates alleging, inter alia, violations of Labor Law § 240 (1). Focusing upon the definition of the term “employee” utilized in the statute, the Court of Appeals noted that when liability under Labor Law § 240 (1) is imposed upon an out-of-possession owner (such as a landlord), there is generally some relationship between the owner and the injured worker, i.e., lease agreement, an easement, contract etc., which makes the injured worker an “employee” for purposes of the statute. In this case, however, the landlord had no control over which company provided and maintained cable service, as that decision lied with the municipality, as provided by the Public Service Law. Thus, finding no nexus whatsoever between the injured worker and the landlord, the Court held that he was not an “employee” as contemplated by the statute and, therefore, Labor Law § 240 (1) was inapplicable. Furthermore, the Court offered an alternative reason for declining liability under the statute, finding that plaintiff was engaged in “routine maintenance”, rather than erection, demolition, repairing, altering, painting or cleaning of a building as required by the statute.
Subcontractors should be pleased with the outcome of this case. It may represent the first step in restoring common-sense to New York State’s statutory scheme for assigning liability for workplace accidents, as it curtails the scope of liability under the Labor Law rather than expanding it.
OPPOSING AMICUS BRIEF FILED ON CONTINGENT PAYMENT CASE (Go Top)
The General Building Contractors of NYS (GBC) has filed an amicus brief in support of the defendant general contractor in the New York Supreme Court Case Gomez Electrical Contractors, Inc. v. Bast Hatfield, Inc. As reported in the November 2004 NESCA Newsletter, NESCA had previously filed an amicus brief in support of the plaintiff subcontractor. This case involves the obligation of the general contractor to pay subcontractors in the event the owner fails to pay the general contractor. In the 1995 West-Fair Electric Court of Appeals decision, the court held pay-if-paid clauses to be void and unenforceable as contrary to public policy set forth in Section 34 of the New York State Lien Law.
With regard to the Gomez case, the general contractor had included a provision in the subcontract which stated: “In the event that the Owner fails to pay BHI, in whole or in part, any sums due under the general contract, which sums include sums as may be due to SUBCONTRACTOR from BHI, SUBCONTRACTOR acknowledges and agrees that it shall accept in full satisfaction of its payment rights the assignment from BHI to SUBCONTRACTOR all of BHI’s lien rights against Owner, to the extent of the unpaid sum due to SUBCONTRACTOR. BHI shall in all respects cooperate with SUBCONTRACTOR in pursuit of such assigned lien rights and shall execute such other further documents as may be necessary to permit SUBCONTRACTOR to pursue such lien remedy. SUBCONTRACTOR agrees that it will accept in satisfaction of any sums due it from BHI in such situations such sums as may be recovered from the Owner through the pursuit of the Lien Law remedies.” When the owner failed to pay the general contractor, the general contractor sought to avoid its obligation to pay the subcontractor by citing this provision.
In its amicus brief, the GBC argued that enforcement of the assignment provision is not prohibited by the West-Fair decision because the provision does not result in the subcontractor waiving its lien rights, and thus the provision does not violate the public policy as articulated by the Court in West-Fair. The GBC also argued that the general contractor and subcontractor should have the right to “freely contract.”
NESCA, on the other hand, argued in its brief that the assignment by the general contractor of its lien rights to the subcontractor does not give the subcontractor any lien rights which it does not already have, and in fact is a transfer of inferior lien rights which are worthless to the subcontractor, making the general contractor’s consideration for the assignment insufficient and illusory. NESCA further argued that in essence, the assignment provision provides that in the event the owner does not pay the general contractor, the general contractor will have no payment obligation to the subcontractor. This is, in fact, a pay-if-paid clause, the same in substance as that addressed by the Court in West-Fair.
CALENDAR OF EVENTS (Go Top)
December 2, 2004
Board of Directors Meeting
Century House, Latham, 6 pm
December 9, 2004
NESCA Holiday Meeting
Century House, Latham, 6 pm
December 9-10, 2004
OSHA 10-Hour Course
Building Industry Center, 1 pm
January 13, 2005
Board of Directors Meeting
Century House, Latham, 5 pm
January 13, 2005
NESCA Membership Meeting
Century House, Latham, 6 pm
December 9th is NESCA’s Annual Toys for Tots Night! (Go Top)
Please remember to bring an unwrapped toy with you to donate to the U.S. Marine Corps Toys for Tots Campaign. NESCA has participated in the campaign every year since 1978. Let’s bring the Marines lots of toys this year! In addition to the toys members bring to the meeting, NESCA will donate $2,300 raised at the October 14th Trade Show.
A Ping 7-iron at the September 20th NESCA Golf Outing at Wolferts Roost Country Club. If you found a 7-iron at the Golf Outing, please contact the NESCA office.
WELCOME NEW MEMBERS (Go Top)
AHR Industries, Inc.
PO Box 101, 17 Robin Lane
Waterford, NY 12188
(518) 235-8104; Fax (518) 235-8104
Contact: Ed Fronczek
Commonwealth Benefit Group, LLC
14 Corporate Woods Blvd., Ste. 100
Albany, NY 12211
(518) 449-4541; Fax (518) 463-7627
Contact: Todd McDonald
JR Builders Supply Corp.
PO Box 12445
Albany, NY 12212
(518)456-1771; Fax (518) 456-0997
Contact: Barb Hrbek
272 Wolf Road
Latham, NY 12110
(518)452-0440; Fax (518) 452-1442
Contact: Frank Emond
WESKO Safety & Construction Services, Inc.
PO Box 439, 964 Conklin Road
Conklin, NY 13748
(607) 723-6714; Fax (607) 723-6743
Contact: Jay Klein
In December, the following members have reached milestone anniversaries as members of NESCA. Thank you very much for your continued support!
Eberl Iron Works, Inc.
Insulation Specialty, Inc.
J. Hogan Refrig. & Mech., Inc.
Sanders Fire & Safety
OSHA LAUNCHES NEW WEB PAGE FOR RESIDENTIAL CONSTRUCTION (Go Top)
The U.S. Occupational Safety and Health Administration (OSHA) has launched a web page containing information and tips specifically related to safety and health for workers in the residential construction industry. The web page was created with guidance from the National Association of Home Builders (NAHB), and features information about OSHA standards that apply to residential construction as well as the hazards present in residential construction and solutions available to the industry.
OSHA’s new web page was created as part of the OSHA-NAHB Alliance that was formed in 2003. The site provides the home building industry with information about electrical safety, fall protection, fire safety, hand and power tool safety, scaffolding, personal protective equipment, and safety programs specific to residential construction. To visit the web page, go to www.osha.gov/SLTC/residential/index.html.