COVID-19 Employment Challenges With the COVID-19 outbreak, employers are facing many questions related to managing their workforces, protecting their employees, and navigating the effect of government efforts to contain the spread of the virus. This situation evolves daily, and employers’ legal obligations continue to change as the pandemic grows. The flood of information can be overwhelming, but knowing what questions to ask can make it more manageable. Rather than further bombarding you with information that may be outdated by the time you read it, we wanted to provide you with a list of topics for which you need to make sure you have current information. As employers continue to deal with COVID-19, they should be cognizant of the following employment issues that may arise:

Read the full article here. 

In his March 18 afternoon press briefing, Governor DeWine advised Ohio employers to take the temperatures of all employees every day and went so far as to say that if employers do not do this, the next step will be to close all but essential business. The EEOC released the following updated information on the ability to take the temperatures of applicants and employees, as well as permissible questions related to medical condition of an employee who calls in sick.

Read the full article here. 

During this 30-minute phone conference, Hahn Loeser’s Construction Team will discuss:

  • project delay issues arising from the coronavirus pandemic (and documentation best practices)
  • employee retention and staffing issues

Hahn Loeser partners Aaron Evenchik, Andy Natale and associate Greg Thompson, along with Employment Practice Area Chair Steve Seasly will discuss the latest guidance, provide proactive information, and address questions from attendees.

Thursday, March 19, 2020

12:00- 12:30 p.m.

Join this Webex Meeting

Meeting Number (access code): 801 942 102

Meeting password: HLP123
Join Meeting

Join by phone:

1-877-668-4493 (toll-free number – US and Canada)

1-650-479-3208 (toll number – US and Canada)

The COVID-19 coronavirus is impacting every aspect of the economy, and construction will not be exempt.  Materials and deliveries may be slowed, crews quarantined and unavailable, and projects delayed.  We view COVID-19 as an event beyond the control of a party (an “act of G-d”), falling within the force majeure provision of most contracts.  Some standard form construction agreements already define “force majeure” in such a way as to expressly include “epidemics” (which the COVID-19 coronavirus is).  Contracts published by ConsensusDocs, DBIA, and The Engineers Joint Contract Document Committee all include “epidemics” within the scope of events that support an “excusable delay.”

As a force majeure event, the impact of COVID-19 may be deemed an excusable, but non-compensable, delay.  Contractors will likely be entitled to an extension of time to perform but not additional compensation (although they possibly may be reimbursed for acceleration costs if a schedule cannot be extended – assuming that is even possible).

Contractors will want to send notice promptly after becoming aware that COVID-19 has affected materials deliveries, labor availability, or other aspects of a project, in strict accordance with the contractual notice requirements, advising of the delay.  Likely, the extent of the delay will be unknown, as it may not be clear when restrictions will be lifted, when travel and deliveries will be reinstated, or when crews will be healthy and available.  Contractors would be mistaken to do nothing and presume that the customer will be reasonable.  It is far more prudent to send a simple notice explaining the delay, stating that the duration will be unknown, and stating that the contractor is requesting an extension of the contract performance time.  Contractors should be sure to check the precise contractual provisions relating to providing notice of delay, because some contracts require contractors to waive their rights to an extension of time to perform if they fail to provide notice in strict accordance with the terms of the contract.  Contractors will also want to track and be able to document delivery delays and crew and material availability in order to support the full extent of any requested extension.

Owners, landlords, and lenders affected by these delays will also need to be reasonable in terms of modifying schedules and expectations.  The full extent and impact of COVID-19 will not be known for some time, and all members of the industry will be well-advised to exercise patience as we navigate these uncertain waters.

 

On October 23, 2019, the Ohio House of Representatives introduced a bill (H.B. No. 380) that would amend Ohio’s Prompt Pay Act (ORC Section 4113.61) to provide general contractors with payment protection similar to that currently enjoyed by subcontractors under the Act.

Yesterday, the legislature approved an amendment to the Bill that clarifies that the Bill affects only private projects (payment terms on public projects would be unaffected). The amendment also reduces the originally proposed 35-day payment term to 30 days.

As we reported last autumn, under the proposed Bill, owners would be permitted to withhold amounts only for retention or for disputed liens or claims relating to the work. The bill does not appear to permit the parties contractually to lengthen the payment term, and failure to make timely payment would require an owner to pay interest at 18% per annum. The bill also expressly permits (but does not require) owners to reduce retainage by agreement in the contract.

We will be monitoring the bill’s progress closely and will keep our clients informed of its progress.

On Friday, January 24, 2020, a Lake County Common Pleas Court returned a unanimous jury verdict in favor of Hahn Loeser’s client — TRAX Construction Co. — against the Village of Reminderville, Ohio, its design professional OHM Advisors, Inc., and Village Engineer, Eugene Esser, awarding our client the full $1.1 million it sought for compensatory damages.  The jury also found OHM Advisors and Mr. Esser had committed fraud, and in addition to liability for compensatory damages, awarded TRAX $375,000 in punitive damages and its attorney’s fees. Continue Reading Hahn Loeser Obtains Unanimous Jury Verdict for TRAX Construction Co.

The Tax Cuts and Jobs Act of 2017 created a lucrative new tax incentive for certain business owners: the ability to deduct up to 20% of their qualified business income. Thus, a business owner who qualified for the deduction could earn a taxable income of $500,000 but pay tax on as little as $400,000, resulting in tax savings of nearly $40,000.

Like nearly all provisions of the tax code, however, the deduction is subject to a myriad of exceptions, limitations, and special rules. Among other things, the deduction is reduced or even eliminated depending on the owner’s income, the nature of the business, how the business is organized (the deduction is only available to pass-through businesses such as partnerships, S corporations, and sole proprietorships), how much the business pays in wages, and how much property it uses.

When the deduction was added to the tax code, construction business owners, in particular, faced uncertainty about whether they qualified for the deduction if their income exceeded a specified amount, whether they could combine multiple trades or businesses into a single business (or separate a single business into multiple businesses), and whether income from rental activities qualified for the deduction.  Recent IRS regulations have clarified these and other issues, generally in taxpayer-friendly ways. Continue Reading Construction Business Owners Can Benefit from the Qualified Business Income Deduction

The Seventh District Court of Appeals’ decision in Union Local School District v. Grae-Con Construction is another important victory for the Ohio construction industry in the ongoing debate over the proper application of Ohio’s construction statute of repose, R.C. 2305.131.  The Seventh District Court of Appeals, applying the Supreme Court of Ohio’s July 2019 decision in New Riegel Local School District v. Buehrer Group Architecture & Engineering, Inc., et al., reaffirmed dismissal of stale breach-of-contract claims under Ohio’s construction statute of repose.  The Seventh District rejected three separate arguments advanced by Union Local, which was attempting to overturn the trial court’s rejection of Union Local’s breach of contract claims against contractors and other project participants.  The Union Local opinion is yet another example of Ohio courts interpreting and applying the construction statute of repose to prevent prosecution of stale claims many years after project completion.

Union Local’s first argument was that the construction statute of repose did not apply to breach of contract claims.  The Union Local appeal had been stayed pending the outcome of New Riegel, so the Seventh District was able to swiftly dispose of Union Local’s argument based on the Supreme Court of Ohio’s July 2019 holding that Ohio’s construction statute of repose bars breach of contract claims as well as tort claims filed more than 10 years after project substantial completion.  (Hahn Loeser previously summarized the impact of New Riegel here.)  Continue Reading Ohio Court of Appeals Applies Supreme Court’s New Riegel Decision; Rejects School District’s “Accrual” Argument to Resurrect Claims

Hahn Loeser & Parks LLP has been named among the “Best Law Firms” nationally by U.S. News & World Report and Best Lawyers® in 2020 in 11 practice areas, including Construction Litigation. In addition, four Hahn Loeser offices have been named “Best Law Firms” in their respective markets in 40 regional rankings, including Construction Law (Cleveland) and Construction Litigation (Cleveland and Columbus).

The 2020 “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process. Receiving a tier designation reflects the high level of respect a firm has earned among other leading lawyers and clients in the same communities and the same practice areas for its abilities, its professionalism and its integrity.

To view our firm’s complete list of 11 nationally ranked practice areas and 40 regional rankings, click here.