Month: January 2020

Construction Change Order: Friend or Foe

The dreaded Change Order or CO is almost unavoidable on most projects. COs commonly result because of things such as inaccurate specifications, ambiguous or inaccurate drawings, unforeseen conditions at a job site, issues with construction materials, faulty budgets or schedules, or additional requests or changes by an owner. CO logistics vary by contract, and it is important for all contract parties to understand, and follow, the change order requirements.

Either party may initiate a CO. Unfortunately, when the contractor has initiated the CO, skepticism may commonly arise from the owner’s team. One way to avoid this is to maintain a positive project relationship among the parties, including not letting issues linger. After-the-fact COs are particularly frustrating, and typically such delays waive entitlement to otherwise valid change claims.

Regardless, although initiating a CO may induce animosity between the parties, COs serve important purposes and are better viewed as a positive first step to avoid later disputes and disputes resolution processes.

Whether the CO is friend or foe depends on one’s perspective. From the perspective of a friend, properly administered CO processes provide a means for documenting scope changes, addressing pricing changes, and memorializing other changes or modifications to the base contract. They can prevent “scope creep” and, when properly memorialized, may confirm the agreement of the parties about the subject of the CO.

When properly prepared and administered, the CO clearly and effectively memorializes the “why, how, who, and what” of the change by providing a clear roadmap for why certain changes were made, who directed the changes, etc.  This helps prevent many problems that typically arise later after memories may have faded or intentions been forgotten. Accordingly, CO’s should include more, rather than less, detailed information, including approved sketches of the changed work as appropriate.

The parties do not want to be “penny foolish” about CO preparation. Even a small undocumented change in construction can result in significant negative impacts on the overall project, promote animosity and distrust among the parties, preclude otherwise allowable adjustments to the contract’s time, performance period, or both, and even result in unexpected liabilities.  Contractors and owners alike should seek the assistance of legal counsel to assist with the memorialization of key construction records for that day when your project encounters problems or changes and memories suddenly go hazy amid the finger-pointing.

Virginia’s Right To Work Law Is Under Attack

Virginia Senate Majority Leader Dick Saslaw (D-Fairfax) has introduced a bill to repeal a key provision of Virginia’s right to work law. Since 1947, the law in Virginia has been that no one can be compelled to join a union (Va. Code § 40.1-60) or to pay union dues against his or her will: “No employer shall require any person, as a condition of employment or continuation of employment, to pay any dues, fees or other charges of any kind to any labor union or labor organization.” Va. Code § 40.1-62. This provision against compelled union dues is the core of Virginia’s right to work law – a law that is generally misunderstood, often confused with “employment at will” (an unrelated legal doctrine), and frequently maligned by unions and their supporters. Many observers credit the right to work law as one of the reasons that Virginia is considered the top state for businesses and that Virginians enjoy a high average household income.

The bill Senator Saslaw introduced in the General Assembly on January 7, 2020, would allow employers and unions to compel employees to pay a portion of union dues—which the bill refers to as “fair share fees”—even if the employee does not support the union and does not want to join the union. The so-called “fair share fees” would be a pro rata share of the union’s dues attributable to the union’s costs for collective bargaining, administration, enforcement of the collective bargaining agreement, representation of employees before public bodies and in grievances, and union governance and administration. Only the portion of union dues attributable to the union’s political activities, lobbying, organizing, charity, donations, and community services would be excluded. The “fair share fees” would be up to 60% of the full union dues required for union members.

When employees have a choice whether to pay “fair share fees”—also called “agency fees”—they generally opt not to. In 2018, the U.S. Supreme Court in Janus v. AFSCME ruled that for government employees, mandatory union fees violate their First Amendment rights. Following that decision, more than 200,000 agency fee payers stopped paying; two major public sector unions reported losing more than 90% of their agency fee payers. The Janus decision, however, would not prevent the application of Senator Saslaw’s bill to non-government employees and employers.

Senator Saslaw’s bill would force employees, against their will, to give money to unions. The bill would encourage unions to organize Virginia workplaces because if they can persuade a simple majority of a workforce to vote for the union, they can compel the entire workforce to pay the union. Many view this as a benefit to the unions at the expense of workers that will make Virginia less attractive to businesses.

Businesses who support Virginia’s right to work law should call upon their representatives in the General Assembly to oppose this bill and ask Governor Northam, who has opposed repeal of the right to work law, to stop this legislation. In the meantime, with this threat lurking on the horizons, union-free Virginia businesses should take steps to remain union free. The experienced labor law attorneys at Vandeventer Black are available to assist businesses in those efforts.

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