Regulatory agencies and the construction industry went head-to-head several times this year, with both sides landing solid blows against each other.
Organizations like the National Association of Home Builders have expressed frustration with the number of federal hoops that builders have to jump through in order to do business and testified to Congress that regulations can add nearly 25% to the cost of a home. President-elect Donald Trump also scored major points with construction groups when he campaigned on the promise to peel away layers of red tape.
Nevertheless, seeing little in the way of sympathy or progress with lawmakers, the NAHB, Associated Builders and Contractors, Associated General Contractors of America and other industry groups launched major public relations campaigns and legal offensives against what they considered the biggest business killers this year, seeing both victory and defeat along the way.
Silica dust rule
One of the most controversial regulations this year came from the Department of Labor’s safety arm, the Occupational Safety and Health Administration (OSHA).
Despite pushback from construction groups and other affected industries urging OSHA to reconsider, the agency issued a revised, final silica rule in March, which reduced allowed exposure for construction workers from 250 micrograms per cubic meter over an eight-hour period to 50 micrograms. The rule, which aims to reduce occurrences of silicosis in workers, also requires that affected companies record all worker exposure to silica and provide medical exams every three years for those workers whose exposure is extensive to make necessary the use of a protective respirator for 30 days or more a year.
The construction industry stepped in to try to block the planned June implementation, arguing that the new rule could cost billions of dollars, which was significantly more than OSHA estimated. Construction organizations also predicted that the proposed regulation would result in the loss of more than 33,000 full-time jobs for construction companies and related businesses. In addition, the industry said the technology was simply not available at a reasonable cost to monitor silica at the required levels, an assertion which rule advocates dismissed.
The rule is now in effect, and just this month OSHA fined a Burbank, IL, contractor, JW Construction and Plastering Inc., $80,741 and cited the company with failure to adequately train employees and provide protective equipment for work involving silica, among other violations.
Temporary winner: Industry groups
The construction industry and representatives from other industries had better luck this year preventing implementation of a revised federal overtime rule, a new DOL regulation that aimed to make salaried employees earning up to $47,476 per year eligible for overtime, a significant increase from the current exempt threshold of $23,660. Construction industry outcry was strong, particularly on the part of NAHB Chairman Ed Brady. He called the rule "sheer arrogance" and argued that it did not consider the difference in pay scales around the county and that it would only serve to bump salaried employees back to an hourly wage.
Late last month, however, Texas U.S. District Judge Amos Mazzant agreed with groups that filed a lawsuit trying to block the rule and issued a nationwide injunction against its implementation. Mazzant said the DOL created "a de facto salary-only test" and declared the overtime rule unlawful. The DOL can appeal the judge's decision, but the incoming Trump administration would most likely scuttle any such action.
Fair Pay and Safe Workplaces "blacklisting" rule
Temporary winner: Industry groups
The success of the construction industry against the Fair Pay and Safe Workplaces rule, also known as the "blacklisting" rule, was similar to than with the overtime rule.
Earlier this year, the Obama administration enacted the regulation, which would require contractors seeking federal work to report any recent labor law violations. While some union organizations support the measure, construction industry groups like the AGC said that it could result in unfair debarment. Regulators outlined plans for a five-phase rollout back in August, but construction groups were fast to point out that, under the rule, contractors could end up being punished twice for violations that had already been resolved or unjustly penalized for matters yet to be adjudicated.
Again, a federal judge in Texas put the brakes on the rule's introduction and issued a preliminary injunction. In her decision, U.S. District Court Judge Marcia A. Crone said the plaintiffs, which included construction groups like the ABC, "properly demonstrated immediate and ongoing injury to their members if the rule is allowed to take effect." Again, that rule is on hold, and it remains to be seen if it can survive a Trump administration.
Anti-retaliation provision of OSHA's electronic recordkeeping rule
Things didn't go so well for construction industry groups in their efforts to sideline the "anti-retaliation" provision of OSHA's new electronic recordkeeping rule.
The regulation prevents employers from drug testing workers after an on-the-job accident unless drugs are suspected to have contributed to the incident. OSHA has maintained that the rule would encourage injured or ill employees to make a report without fear of repercussions. The industry disputed that argument and pursued legal action against the rule's implementation, claiming that employers would be stymied in their efforts to conduct successful safety programs.
The legal challenge caused OSHA to push back the rule's effective date to Dec. 1. Late last month, however, another Texas judge ruled in favor of OSHA, denied the requested injunction and said that the plaintiffs did not demonstrate how the rule would cause "irreparable harm."
Labor Management Reporting and Disclosure "persuader" rule
Winner: Industry groups
The Labor Management Reporting and Disclosure Act (LMRDA) was an attempt on the part of the DOL to make public previously privileged communication between an employer and attorney around union organization issues. Construction industry groups were not happy when the DOL announced the new regulation and insisted that it would keep them from obtaining necessary legal advice about their rights and responsibilities if employees tried to unionize. Without adequate legal advice, they said, employers could potentially walk into other violations.
In June, U.S. District Judge Sam Cummings issued a temporary injunction against the rule suggesting that it could constitute a violation of the First Amendment. Then, in November, Cummings issued a permanent injunction against the regulation, reaffirming his position that it was an attempt on the part of the DOL to lump attorney-client communication in with that of outside consultants who are typically hired during union organization efforts.