If you have been around Texas construction in the past decade, you’ve no doubt heard about a foreman shopping his crew around. You’ve probably worried about a key superintendent or project manager taking his skills to your competitor. Maybe you have lost sleep over an estimator with a LinkedIn profile that says he is immediately
COVID-19 is now interrupting and, in some instances, cancelling contracts across the country. While the situation is highly fluid, these business disruptions appear likely to continue and perhaps even worsen in the immediate future. This will significantly affect and perhaps threaten businesses people have worked had to establish. And it will of course impact employees…
In October 2016, the Antitrust Division of the U.S. Department of Justice (DOJ) issued guidance identifying poaching agreements and wage-fixing agreements as primary antitrust enforcement targets. In April 2018, DOJ brought the Department’s first enforcement case over illegal anti-competitive employment related agreements.
In a market where skilled labor is in increasingly high demand, and the price of labor continues to rise, scrutiny of employment-related agreements is also on the rise. Industries facing skilled labor shortages are natural targets of DOJ scrutiny, the construction industry is no exception.
Since at least 2008, Flood, Fire, Famine and Pestilence have ravaged the construction workforce across America. In the downturn, many workers left the industry never to return. Others left the U.S. and have not returned. Couple that with construction growth, a resistance to training workers who may leave for another dollar an hour, and seeming lack of interest in construction jobs by the current generation now entering the workforce, and you’ve got the makings of a big challenge.
Protect yourself on the contracting side before heading into the storm . . .
Understand and navigate the government’s amplified focus on undocumented workers to protect your business from escalating fines, jail time, delay damages and back-charges
Whatever your political views, undocumented workers and the businesses that knowingly or unknowingly employ them have been under the microscope since President Trump took office in January 2017.
According to U.S. Immigration and Customs Enforcement (ICE), between Oct. 1, 2017, and May 4, 2018, there were:
- 2,282 employer audits opened, nearly a 60% jump from the 1,360 audits opened between October 2016 and September 2017,
- 594 employers arrested on criminal immigration charges, up from 139 during the previous fiscal year, and
- 610 civil immigration charges, compared to 172 in the preceding 12 months
Texas is a hot-bed for construction. In 2016, according to the Virtual Builders Exchange, Texas was second only to New York in construction expenditures, spending $44.4 billion. And there is no sign that the proliferation of construction is slowing down. New housing starts are up in Texas as a result of an influx of new employees moving to the area. The U.S. Census Bureau reported that Texas has experienced the largest population growth of any state between 2010 and 2016. This, in turn, increases demand on civil infrastructure thus requiring more construction. This explosion of growth in construction spending has taken place without consideration given to the rebuilding efforts arising from the aftermath of Hurricane Harvey.
Co-author: Michael Kelsheimer
If you compile recent headlines, you’ll know the President has implemented two immigration bans, is challenging so-called “Sanctuary Cities” that do not help Federal immigration enforcement, has instructed government agencies to become more aggressive in enforcement of immigration laws, and is already reviewing proposals to strengthen the border wall. On top of this, the E-Verify program for verifying worker status is likely to become mandatory.
Further, employers who try to do it right by using the H-2B program have been dealt a stiff blow. The Returning Worker Program, which dramatically extended the stingy 66,000 nationwide cap on H-2B non-immigrant workers, has not been renewed. The H-2B cap has already been reached for 2017, so the hope for help there is gone.
A recent article in the Wall Street Journal discussed the rise in litigation regarding covenants not to compete, along with a summary of the positives and negatives of these covenants. For good or bad, a covenant not to compete is enforceable in Texas if it is ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made, but only to the extent that the covenant contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other protectable interests of the employer.