January 2, 2018 the U.S. Department of Labor issued a Federal Register notice announcing an increase in the maximum penalty amounts for violations of Federal OSHA and Regulations.
Under the new penalty structure, the maximum penalty allowed for “serious” and “other-than-serious” violations are $12,934. In addition, the maximum penalty allowed for “failure-to-abate” the violation is $12,934 each day that an employer fails to abate the specific violation. Finally, the maximum penalty allowed for “willful” and “repeat” violations is $129,336, 10 times the maximum permitted for “serious” and “other-than-serious” violations.
States that have their own occupational safety and health standards and regulations also must raise their maximum penalty amounts for violations by the same amount. Going forward, the maximum penalty amounts will be increased every year adjusted for inflation.
Businesses need to take immediate notice of these continuing increases in the maximum penalty amounts for OSHA violations. Companies seriously should consider future monetary risks associated with accepting proposed OSHA citations and penalties as written.
Contact Grant Davis at 1-888-991-2929 to get your written OSHA safety plan.
When OSHA regulations, don’t cover everything, and where there’s no specific standard, OSHA uses the General Duty Clause(GDC) of the OSHA Act as a “gap filler” in enforcement actions. The Agency often looks to voluntary consensus standards as a basis for GDC citations as well as information in manufacturer’s handbooks, and warning labels. Over the past 3 years, OSHA’s use of the GDC as an enforcement tool has increased 15% percent.
The courts have interpreted OSHA’s GDC to mean that an employer has a legal obligation to provide a workplace free of conditions or activities that either the employer or industry recognizes as hazardous and that cause, or are likely to cause, death or serious physical harm to employees when there is a feasible method to abate the hazard.
Protect Your Business from The General Duty Clause
OSHA inspectors seek to focus its resources on the most serious, unsafe and hazardous workplaces.
No Safety Plans, Out-dated Safety Plans or No Active Safety Program.
Imminent dangerous situations.
Frequent accidents, catastrophes and fatalities.
Employee complaints, referrals and follow-up visits.
Surprise visit, planned or programmed investigations.
Find Out if You Need To Report That Incident:
OSHA PENALTY REGULATIONS
Labor Code 6401.7 (a) states that every employer shall establish, implement and maintain an effective written Injury and Illness Prevention Program (IIPP) the Department of Labor issued a rule implementing significantly higher penalties upon employers for Occupational Safety and Health Act violations.
Don’t Let OSHA PENALIZE Your Business
Avoid These Costly Fines By Preventing This From Happening to Your Business
Contact Grant Davis at GDI Insurance Agency, Inc today 1-888-991-2929.
At the bottom of each written explanation are folders that have a list of the mandatory and extra safety plans you will receive whatever your business needs in a Safety Plan Bundle.
Don’t find yourself empty handed. These high penalties and fines can easily ruin your bottom line bringing havoc to your daily business operations. This situation can happen to any business!
Legalized Marijuana and Employment: Off-duty Use and Drug Testing
While all marijuana use remains illegal under federal law, most states, including California, have enacted laws that allow certain uses of legalized marijuana or a marijuana derivative. None of these laws place any restrictions on an employer’s right to administer drug tests or to prohibit their employees from using or being under the influence of marijuana at work or during work hours.
However, it is not always clear whether an employer may take adverse employment actions against an employee based solely on a positive test for legalized marijuana. As a result, several courts have issued
decisions on this issue. These decisions will answer this question for employers in some legalized marijuana states and may be helpful for employers in others.
Links And Resources
National Conference of State Legislators’ website on state marijuana laws
This Compliance Overview provides a general summary of federal and state marijuana laws and the court decisions that provide guidance for employers in this area.
OVERVIEW
Under virtually every state law that legalizes marijuana use, employers have an explicit right to prohibit their employees from using or being under the influence of marijuana at work or during work hours. In addition, none of these laws place any restrictions on an employer’s right to administer drug tests.
Employment disputes can arise when a state’s marijuana law does not address whether employers may prohibit employees or applicants from engaging in off-duty marijuana use. The inconsistency between federal law and state marijuana laws also leads to questions regarding employers’ obligations.
FEDERAL AND STATE MARIJUANA LAWS
The federal Controlled Substances Act (CSA) classifies marijuana as a Schedule I substance, which means it is considered to have high potential for abuse and no currently accepted medical applications. All uses of Schedule I substances are illegal under the CSA. In addition, the federal Food, Drug and Cosmetic Act (FDCA) prohibits the use, dispensing and licensing of substances, such as marijuana, that have not been approved by the federal Food and Drug Administration.
Nevertheless, most states have passed laws legalizing certain uses of marijuana. These states generally fall into one of the following three categories:
CBD-only – This category includes states that allow only tightly limited uses of a substance called cannabidiol (CBD), which is a derivative of marijuana that does not produce psychoactive effects in users and is usually administered in oil form. These states have not legalized the use of marijuana plants for any purpose and generally allow CBD use only for the treatment of one or more specified medical conditions, such as epilepsy in children. Because of these factors, employment-related issues rarely arise under these laws. The table below lists the states that fall into this category.
Medical-only – This category includes states that allow the use of marijuana plants for medical purposes but do not allow any recreational use. Out of the three types of state marijuana laws, medical marijuana laws generally underlie most employment-related disputes involving the drug. The table below lists the states that fall into the medical-only category.
Recreational and medical – This category includes states that allow individuals who are age 21 or older to use marijuana plants for recreational purposes. Each of these states also has a separate law governing the use of marijuana for medical purposes. The table below lists the states that fall into this category.
COURT DECISIONS ON FEDERAL VS. STATE MARIJUANA LAWS
At least two state supreme courts have held that, because all marijuana use is illegal under the CSA, federal law protects employers from lawsuits for
taking an adverse employment action against an individual based on his or her marijuana use that is legal under state law. Specifically:
In Ross v. Raging Wire Telecommunications, issued on Jan. 24, 2008, the California Supreme Court held that an employee did not have the right to sue his employer for terminating his employment based on off-duty medical marijuana use, which was legal under the California Compassionate Use Act (CUA). The court held that the state’s Fair Employment and Housing Act, under which the employee brought a disability discrimination claim, does not require employers to accommodate the use of drugs that are illegal under federal law.
In Coats v. Dish Network, issued on June 15, 2015, the Colorado Supreme Court held that an employee who uses marijuana in compliance with Colorado’s medical marijuana law does not have the right to sue his or her employer under a separate state law that bars employers from terminating an employee based on his or her off-duty participation in lawful activities. The court’s reasoning was that because the federal law prohibits all marijuana use in all states, the employee could not prove that his use of medical marijuana was lawful.
More recently, however, two other courts have held that federal laws do not protect employers from lawsuits for adverse employment actions based on legalized, off-duty marijuana use.
Specifically:
In Barbuto v. Advantage Sales and Marketing, issued on July 17, 2017, the Massachusetts Supreme Judicial Court rejected an employer’s argument that the federal CSA renders an employee’s off-duty use of marijuana an “unreasonable” accommodation for her disability under the Massachusetts Anti-discrimination Act (MADA). Noting that the federal CSA does not put an employer at risk of prosecution for its employees’ possession of marijuana, the court held that because the Massachusetts Medical Marijuana Act specifically allows employers to prohibit on-site marijuana use by employees, it “implicitly recognizes” that allowing off-site use “might be” a permissible accommodation for disability under the MADA.
In Noffsinger v. SSC Niantic Operating Co., issued on Aug. 8, 2017, the U.S. District Court for the District of Connecticut ruled that because the federal CSA and FDCA do not regulate employment relationships nor make it illegal to employ a marijuana user, neither of these federal laws invalidated an employee’s right to sue her employer for terminating her employment based on her lawful use of marijuana. The court held that the Connecticut Palliative Use of Marijuana Act grants this right, because it specifically prohibits employers from taking any adverse employment action against an individual based on his or her status as a “qualifying patient” who is authorized to use medical marijuana.
Although courts in other states are not bound by any of these decisions, the opinions suggest that employers in states with legalized marijuana should take caution before relying solely on federal laws, such as the CSA, to justify adverse employment actions against an individual who tests positive for marijuana.
STATE MARIJUANA LAWS THAT ADDRESS OFF-DUTY USE
In some states, employers may find relatively clear guidance within the text of their applicable marijuana laws themselves.
For example:
Maine’s recreational marijuana law prohibits employers from refusing to employ or otherwise penalizing a person who is 21 or older solely because of his or her consumption of marijuana outside of the employer’s property
Arizona and Delaware’s medical marijuana laws specify that, unless compliance would result in a loss of any monetary- or licensing-related benefit under federal law or regulations, employers may not take any adverse employment action against an authorized medical marijuana user based on the fact that he or she tests positive
for marijuana components or metabolites, unless the employer had reason to believe that the authorized marijuana user who tested positive had been using or was under the influence of marijuana at work;
Arkansas’medical marijuana law includes provisions virtually identical to those described above for Arizona and Delaware but also specifies that an employer may exclude an authorized medical marijuana user from safety-sensitive positions if it has a good faith belief that the individual currently uses marijuana; and
Florida and Ohio’s medical marijuana laws specify that employers have the right to establish and enforce zero-tolerance drug testing and drug use policies.
Please note that this list is not exhaustive. Employers should become familiar with their states’ marijuana laws to determine whether they address employers’ rights and obligations relating to workplace drug policies and off-duty marijuana use.
STATE MARIJUANA LAWS THAT DO NOT ADDRESS OFF-DUTY USE
Among the states where the applicable marijuana law is silent about whether employers may take adverse actions against employees solely because they test positive for marijuana, at least two supreme courts have sided with employers in disputes involving this issue.
In particular:
In Ross (also discussed above), the California Supreme Court’s decision in favor of the employer was, in part, based on the fact that the state’s medical marijuana law (the CUA) only provides protection against criminal prosecution for marijuana use and does not address employment rights or obligations.
In Roe v. Teletech Customer Care Management, issued on Jan. 18, 2011, the Washington Supreme Court addressed a claim under the Washington State Medical Use of Marijuana Act (MUMA). Like California’s CUA, the MUMA is silent regarding whether qualified patients are protected from employment discrimination based on marijuana use. Because of this, the court held that the MUMA does not give employees a right to sue their employers for wrongful termination.
Even if an applicable marijuana law does not explicitly address employment issues relating to off-duty marijuana use, employers should be aware that state marijuana laws, especially those governing medical use, may still affect their rights and obligations under other applicable laws.
OTHER STATE and FEDERAL LAWS
As illustrated by the Massachusetts and Connecticut cases discussed above, employers in some states with legalized marijuana may face lawsuits and potential liability under state disability laws for adverse actions taken against authorized, off-duty marijuana users. Therefore, in states where a marijuana law does not address workplace drug policies and off-duty use, employers should consider either accommodating a disabled employee’s state-authorized, off-duty marijuana use or at least engaging in an interactive process with the employee to determine whether other reasonable accommodations may be suitable.
In addition, employers should become familiar with any applicable laws that specifically address workplace drug testing. For example, some states have drug testing-specific laws that require employers to have written policies and certain testing protocols in place before they may even conduct an employee drug test. Similarly, some state workers’ compensation laws prohibit claim denials or adverse employment actions based solely on positive drug tests unless certain requirements are met.
Finally, regardless of whether a state marijuana law applies, certain employers may be subject to federal drug testing requirements. For example, federal contractors may be subject to the federal Drug-Free Workplace Act, and commercial transportation operators may be subject to U.S. Department of Transportation regulations. Employers should become familiar with all applicable laws and regulations to determine their obligations.
This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
About GDI Insurance Agency, Inc.
GDI Insurance Agency, Inc. combines years of experience with leading-edge products to provide exceptional service and value to our customers. Our product offering includes insurance products and risk management services for commercial property and casualty, and marine; specialty coverage’s; surety; and employee benefits, including health, life, disability, and payroll deduction personal lines programs. Contact us today for your business insurance questions 209-634-2929.
You know you need a safety program!GDI Insurance Agency has all the resources you need to help understand that true workplace safety is more than just a simple policy. With the materials highlighted in this workplace safety roadmap, you can provide resources targeted to their need and keep loss control initiatives top of mind-protecting your company’s bottom line.
The Value of Safety
Some employers simply don’t realize the value of safety and the potential cost savings. GDI Insurance Agency, Inc. has created workplace safety roadmap solutions to help you understand and take control of your:
Safety Culture
MOD
Injury Management
Workers’ Compensation
Return to Work Program
Gain Buy-In from Senior Management.
Safety cultures are built from the top down, making management support crucial to safety program success. We will help educate senior management on the benefits of building and maintaining a safety program. Broaden your conversation beyond the basics – not only do safety programs minimize accidents and hold down indemnity, GDI promotes loss control through improved employee morale and reduced absenteeism.
Deliver the WIIFM (What’s in it for Me?)
Are you aware of their responsibilities under OSHA’s General Duty Clause? Do you know how much lost revenue employee absences are costing your company annually? We can Illustrate how employee safety prevents fines, reduces losses and increases revenue.
Financial Impact of Work-Related Injuries Presentation
General Industry Risk Insights: Safety Programs and the Impact to Your Bottom Line
General Industry Risk Insights: Focus on Safety and Health to Benefit Your Business
Safety and Health Audit
Set the Tone
From day one, employees at all levels of the organization should understand the importance of workplace safety. GDI Insurance Agency can help you ensure management, trainers and employees are educated on regulations by furnishing your business with the tools necessary for success.
Elements of a Successful Safety and Health Program
State Guide to Safety Regulation-
Workplace Required Posters-
Employee Safety Manual – General and Industry Specific
General Industry Risk Insights: Creating a Strong Safety Culture
General Industry Safety Matters: Promoting a Safety-Minded Culture
Employee Safety Survey
Safety and Health Survey
Use OSHA to Your Advantage
OSHA compliance is essential to both building a safe work environment and avoiding costly fines. Help simplify your companies compliance issues with these easy to follow OSHA materials.
Work Comp Insights: OSHA’s Four-Point Safety Program
Required OSHA Programs and Training
OSHA On-Site Consultation Program
OSHA’s SHARP Program and Your Organization
Portable Fire Extinguisher Program and Training Materials
Portable Fire Extinguisher Program Presentation
OSHA Program Audit
Help Build and Support a Safety Committee
Even if you already have a safety committee, it may not have all the resources necessary to be successful. The following materials will help you create and support safety committee initiatives to quickly address concerns and encourage positive employee behavior.
Create a Culture of Safety
GDI Insurance Agency can help you build a culture of safety with materials that provide the knowledge and resources needed to successfully support a safety committee.
Safety and Health Committee Responsibilities
Work Comp Insights: Create a Workplace that Prevents Injuries and Increases Productivity
Safety Budget Worksheet
Safety Program “Quick Check”
Minimizing the Risk of Workplace Injury
Comprehensive Safety & Health Inspection Checklist
Deliver a Safety Incentive Program…that Works.
If executed correctly, safety incentives can be one of the most effective tools at an employer’s disposal when it comes to encouraging safety. We will make sure your safety incentive programs are a good fit for the organization’s culture and illustrate success at effectively reducing workplace accidents with the following materials:
Employee Safety Incentive Program Guide
Employee Safety Incentive Policy
General Industry Risk Insights: Is Your Safety Incentive Policy Effective
Safety Incentive Survey
Give Supervisors the tools they need
While the Safety Committee sets the tone, supervisors put the tone into action. By equipping supervisors with the tools need for success, you bring your clients closer to an accident-free workplace and become a trusted safety partner.
Help Employers Set Expectations
Managers and supervisors are busy. They need, and deserve, guidance on how to effectively execute on their safety responsibilities. Help employers communicate expectations, impart best practices and share tips with the documents below.
Supervisor Safety Responsibilities
Safety and Health Programs: Training for Employees, Supervisors and Managers
Supervisor Safety: Reducing Risks for Shift Workers
Safety Coordinator Responsibilities
Qualities of an Effective Safety Coach
Support Injury Cost Containment
Injury management can ensure that injured employees get the care they need while also minimizing claim costs. Employers should appoint a well-respected supervisor or employee to oversee injury management and return to work efforts. GDI Insurance Agency has put together these resources to help.
Work Comp Insights: Selecting and Training Your Injury Management Coordinator
Injury Management Coordinator Job Description
Disability Management Training Workbooks
Supervisor Injured Worker Preparedness Survey
Supervisor Response Training – Workplace Injuries
Support Safety Meetings and Toolbox Talks Weekly or monthly safety meetings are a great venue for promoting safety. Use our vast library of safety meeting talking points to assist you in this recurring activity.
General Industry Safety Matters: Promoting a Safety-Minded Culture
General Industry Safety Matters: Toolbox Safety Meetings- Tips for Trainers
General Industry Safety Matters: Safety Meeting Basics
Attend Your Safety Meetings Poster
Take Time to Meet for Safety
Safety Meeting Sign-In Attendance Form
Offer Employee Communications that’s Targeted and Relevant
We have thousands of documents for dozens of industries – including safety handbooks and policies, brochures, flyers, presentations, posters and payroll stuffers – all created to support your professional client services. Combined with the knowledge of your GDI Insurance broker these templates come to life to help you achieve the goals you and your broker have set for your company.
Topics that Matter
You are unique, and your safety program should be, too. Mix important safety basics with targeted, industry-specific safety communications to address their most pressing needs. Just a few samples:
Construction Playing it Safe: Ergonomics Solutions for Electrical Contractors
Manufacturing Target on Safety: What You Should Know About Hexavalent Chromium
Agriculture Playing it Safe: The Dos and Don’ts of Grain Augers
Education and Childcare Target on Safety: Know the Hazards in Your Classroom
Heath Care Playing it Safe: All About Legionnaires’ Disease
Transportation and Warehousing Target on Safety: Overview on Correctly Securing Cargo
Onboard Employees with Safety in Mind
Whether you you have dedicated trainers or are relying on front line managers and HR for employee education, we can deliver resources to help new employees understand the importance of safety from day one. Some samples:
Supervisor Safety: Reducing Risks for New Workers
Employee Safety Responsibilities
New Employee Safety Orientation Process
New Employee Safety Orientation Guide
Manufacturing Safety Matters: The New Employee’s Top Role Model- You
Construction and Contracting Safety Matters: Teaching On-Site Safety by Example
Different Resources, Same Message
Important messages are worth repeating. GDI Insurance has hundreds of choices in a variety of formats, it’s easy for employers to target employees to reinforce key safety messages and keep them at the forefront of daily operations.
Eye Safety & You Poster
General Industry Safety Matters: Selecting Safety Sunglasses
General Industry Playing it Safe: Protect Yourself from Eye Injuries
Gear Up For Safety: Eye Protection
Protect Your Vision (Payroll Stuffer)
Quiz: Eye Safety
Keeping Safety Top of Mind
Safety programs require constant attention, and maintenance. Provide resources and stay top of mind with monthly safety communication materials for management, risk managers, supervisors and employees.
Short on time? In 10 minutes or less you can support your safety and return to work programs by subscribing to one or more of the following monthly Campaigns:
GDI Insurance Agency has invested in programs and systems that we have organized, and will customize and tailor to your needs. We have taken caring to the next level. We are here and equipped to help you do something about it! Contact us today 1-888-991-2929
With the recent changes to the California Insurance Marketplace, specifically the recent adjustments by the Workers Compensation Insurance Rating Bureau (“WCIRB”) to the way in which Experience Modification Factors (“X-Mod”) are calculated; many organizations were not prepared for the full impact of the changes. It can be especially burdensome for Nonprofit Agencies and Service Organizations that may have a higher susceptibility to loss than other organizations.
Further, Service and/or Mission Oriented Nonprofit Agencies and Nonprofit Organizations have a unique exposure when it comes to injuries to workers (and volunteers) – they typically care too much.
Experience Modification Factor Calculation Change
The WCIRB recently adjusted its way of calculating an organization’s X-Mod by doing away with the fixed value for the Primary Threshold for Losses and replacing it with a formula that creates a sliding scale, Effective January 1, 2017. This sliding scale is intended to give a larger Primary Threshold to larger employers (i.e. Organizations with larger payrolls).
The impact we’ve seen has been a compounding of the impact/magnitude of losses on an organization’s X-Mod, which in turn equates to a similar impact to their Workers Compensation premium.
We recently witnessed one of our Nonprofit agencies clients have an increase in their X-Mod of nearly 15% due almost entirely to the change in the calculation. We’ve been working diligently with this Nonprofit as they have approx. 50 employees and volunteers and this 15% increase in their X-Mod will result in an increase in Workers Compensation premium of no less than $18,000 for just this year alone.
Employees at Nonprofit Agencies
If we take a quick moment and think of a Nonprofit, Service Organization, etc. that we are fond of; what is one of the key components of what makes that Nonprofit, Service Organization, etc. successful? It’s the PEOPLE. The people care, and many times they can care too much. Unfortunately, many times it’s the same people who care so much for the organization that can expose it to unnecessary financial hardship due to an injury.
Example: A Nonprofit is serves meals to members of the community in need. One caring employee sees that there is a pallet of food that needs to be put away. This employee takes it upon themselves to roll up his/her sleeves and “help out”. The pallet contains 40-pound boxes of frozen meat and it needs to be put in the walk-in freezer. The employee feeling the cold of the freezer decides to hurry, twists while lifting one of the last boxes and suffers a lower back injury.
In the example, the employee’s motives were altruistic, however depending on the severity of his/her injury the Nonprofit could be facing steep insurance premium implications. Sadly, this situation happens all too often amongst both employees and volunteers in Nonprofits and Service Organizations.
Volunteers
Many Nonprofit organizations depend, either in whole or in part, on the work and contribution of volunteers. Volunteers are a seemingly “No-Brainer” for Nonprofits to utilize as much as possible, and while this is true there are some potential costs that Directors, Board Members, etc. should be cognizant of.
Although Volunteers do not create a payroll expense, they do create a risk to insurance
Injuries sustained by Volunteers are treated the same as those to Employees
The Cost implications of Volunteer injuries are the same as those of Employees
X-Mod implications are compounded and/or Multiplied by Volunteer injuries
a.The X-Mod is calculated using both Payroll (reduces the factor) and Claim Cost (increases the factor) – Volunteers only contribute to the Claim Cost
To better insulate the Workers Compensation Cost Structure of any Nonprofit, Service Organization, or any other organization for that matter; training and accountability become critical. Although volunteer labor is commonly discounted as “not costing anything”, volunteers should be treated and trained the same or as similar as possible to regular employees.
The best Defense is ALWAYS a good offense, and the same is true in defending against claims. Training, guidance, and open dialogue as to why it is needed can provide incalculable benefits to the organization’s Workers Compensation Cost Structure.
Construction contracts can contain terms that impact your company’s bottom line. Reviewing them carefully prior to signing is indispensable, and can save your company time and money. This contract review guide is meant to be a starting point for reviewing contracts in general. It highlights some common contract terms and their potential impact. You can begin to understand which terms are most often negotiated in contracts generally. Then, with the help of licensed inside or outside counsel, analyze the commercial risks associated with construction contracts in depth and understand terms and conditions to protect your company’s assets. Contact GDI Insurance Agency, Inc. for your construction insurance quote 209-634-2929.
Scope of the Agreement
Examine the definition of services to be provided to ensure the language is clear enough for an unrelated third party to understand the scope of the construction contract. The contract should include a time frame for completion of services. The rights and obligations of both parties should be clearly outlined. Any mechanism for changing the scope of the contract, as well as any of the terms, if allowed, should also be outlined within the contract.
Terms of Payment
Terms of payment should be clearly listed within the contract so that the expectations of both parties are clear. The contract should specify the agreed payment schedule for goods received.
Warranties
There are two types of warranties: express and implied. Both types are assurances regarding particular issues, such as performance.
Express warranties are those that are defined specifically in the contract. Implied warranties are based in statutory and/or common law, depending upon your jurisdiction. They are two-fold: a warranty of merchantability, which requires that goods/services must reasonably conform to an ordinary buyer’s standards, and a warranty of fitness for a particular purpose, which states that if a seller knows the intended purpose for the product or service, the act of selling the product to that customer implies that it is fit for that purpose.
Be aware of warranty disclaimers and understand how the disclaimer limits your statutory rights. If it disclaims all warranties, express and implied, then you will likely be limited to the remedies in the contract for issues related to things like performance. You should also examine any disclaimer in the context of the contract. While it may require you to disclaim your statutory rights, other contract language may give you adequate rights and remedies regarding the points about which you are most concerned.
Damages, Limits of Liability and Indemnification
These three items are often in close proximity to one another in a contract, as they are interrelated. Damages may be defined as certain types of losses that could create liability under the contract. A limit on liability would restrict the amount of damages that a party would be required to pay if found liable for such damages. Sometimes this may also include a limit for indemnification.
Indemnification provisions allocate risk and cost between the parties. It is important to examine whether the party assuming the risk is the party with the most control over that risk. For instance, when a company’s employees are required to work at a customer’s location, the company is often asked to release the customer from all liability relating to the employees presence at the customer’s location.
In some cases, indemnification is limited to negligence or to a specific dollar amount, under a heading of “limits of liability.”
Construction Insurance
Some contracts will contain minimum bodily injury and property damage liability coverage amounts that the party must possess and also may require that the customer is added as an additional insured on those coverages.
Prior to consenting to any contract, it is prudent to examine construction insurance coverage against the amount of liability exposure in a particular contract.
Terms and Conditions in Your Construction Contract
It is also vital to examine any terms and conditions contained in the contract:
Governing Law & Jurisdiction – Look at the governing law provision to make sure that you are comfortable with the implications of the state law chosen by the drafter. This can impact the interpretation of the contract from warranties to indemnification.
Additionally, when specific statutes or regulations are referenced in the body of a contract, it is as though that statute or regulation is wholly contained within the contract itself. It is vital to read and understand that language prior to giving your consent. This happens regularly in government contracting situations.
Dispute Resolution – This is another clause with which you must be comfortable with the laws of the state or forum chosen by the drafter. The rules chosen to govern dispute resolution can impact the outcome. Additionally, you should consider whether dispute resolution is right for your situation.
Intellectual Property – When you are disclosing and/or licensing your company’s intellectual property, be it trademarks, copyrights or patents, it is important to include a clause that recognizes the owner of such intellectual property and affirmatively states that the agreement does not transfer any rights.
Standard of Care – A standard of care clause may appear in certain types of contracts. The standard of care that is provided by the law should provide the minimum standard of care for the provision of services under the contract.
Term/Termination – The contract should provide both parties with the right to terminate the contract. The situations in which termination is allowed will vary from contract to contract. Some contracts will allow the right to terminate in cases of dissatisfaction; others will allow it with a specific notice, for no cause. It is important that you contemplate in what cases you would want the right to terminate the contract. There should also be language defining the term of the contract. Does it have a finite term? Does it automatically renew each period?
Right to Cure – Related to termination, some contracts will contain a right to cure clause. This would give the defaulting party notice of a breach and a finite period of time in which to remedy such a breach.
Standard Form Contracts
Unlike other industries, construction lacks a consistent set of laws like the Uniform Commercial Code or a federal statutory scheme. Contracts produced by professional and trade associations for architects (American Institute of Architects), engineers (Engineers Joint Contract Documents Committee) and commercial contractors (Associated General Contractors of America) can serve as important references and benchmarks when drafting a new contract. They are a good source of industry best practices, and using them can greatly reduce drafting and review time, meaning lower overall transaction costs for your company.
For all of their advantages, there are several things that you should be cautious about when using standard form contracts. Note the following cautions about standard forms before using them:
Standard forms, which are written broadly to encompass many different contexts, require transaction-specific and jurisdiction-specific modifications. For example, certain states require that indemnities be written in a certain way.
Changes made to one part of the document, such as definitions of words or terms, may affect other parts that make reference to it.
Custom-drafted and industry-drafted forms are often incompatible. Even industry-drafted forms from different publishers can be incompatible.
Standard forms always contain the bias of the drafter. Use this bias; know when to use various standard forms published by different industry organizations.
General Understanding
Reviewing general terms and features of construction contracts will help you grasp the consequences of its terms and conditions for your business. In any case, to ensure its completeness and accuracy, it is necessary to submit each contract you must sign to legal review.
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Under the new penalty structure, the maximum penalty allowed for “serious” and “other-than-serious” violations are $12,934. In addition, the maximum penalty allowed for “failure-to-abate” the violation is $12,934 each day that an employer fails to abate the specific violation. Finally, the maximum penalty allowed for “willful” and “repeat” violations is $129,336, 10 times the maximum permitted for “serious” and “other-than-serious” violations.
However, it is not always clear whether an employer may take adverse employment actions against an employee based solely on a positive test for legalized marijuana. As a result, several courts have issued
At least two state supreme courts have held that, because all marijuana use is illegal under the CSA, federal law protects employers from lawsuits for
