The conclusion seems to be that while the Washington State commercial construction industry continues to fare better than much of the country, the near future looks a bit muddled. Meanwhile, the cost of construction materials continues to rise.

On the national scene, FMI's Second Quarter 2008 Report notes, "The outlook for 2008 remains much the same. However, the outlook for 2009 has been revised down slightly because a downturn in nonresidential construction usually lags a slow down in the general economy...While the general economy might be beginning to stabilize somewhat, nonresidential construction is expected to falter late in 2008 and into 2009... The decline in 2009 will be driven by a decrease in nonresidential construction for the first time since 2003."

Highway, water and other infrastructure construction appears as a particular bright spot on the 2009 horizon, according to FMI. This sector is expected to increase by six percent nationally in 2009. Meanwhile, the non-residential building sector is expected to decline by five percent, with particularly large hits to the lodging, office and commercial segments.

To see the full report including national forecasts by industry segment, click FMI's Construction Outlook - 2nd Quarter 2008.

As reported in a recent Seattle Times article, AGC members Bryce Taylor of Lease Crutcher Lewis and Jack Beaudoin of Turner Construction had relatively upbeat assessments for local construction markets. FMI expects a two percent drop in non-residential construction in 2009 for the Seattle area - not great but still better than the national average. In the Times article, AGC Labor Relations Director Doug Peterson noted another sign of slowing growth - longer waits for workers in union halls. "A lot of these guys are not going out" on jobs, he said. "There was a point at which if you could breathe you could get a job. Now, the pressure seems to be off. There are people in the (hiring) hall."

To see the complete Seattle Times article, click Tale of two construction sectors - one still booms, the other doesn't.

With regard to costs, FMI notes "Rising general inflation, plus some rapidly rising material costs could become perilous for nonresidential construction. Steel prices continue to rise and copper prices remain elevated."

AGC of America Economist Ken Simonson also notes the inflation trends. In his recent Data Digest, Simonson reports:

"The producer price index (PPI) for finished goods jumped 1.4% in May, seasonally adjusted, and 7.2% compared to May 2007, the Bureau of Labor Statistics (BLS) reported. The PPI for inputs to construction industries, comprising materials used in every type of construction plus items consumed during construction, such as diesel fuel, soared 2.6% and 8.4%, not seasonally adjusted. Among construction segments, the biggest leap was for highway and street construction, 4.0% and 15%, followed by other heavy construction, 3.5% and 13%; nonresidential buildings, 2.6% and 8.7%; multi-unit residential, 1.9% and 6.3%; and single-unit residential, 1.6% and 4.7%. The highway PPI was propelled by surges in the PPIs for diesel fuel, 9.1% and 76%; asphalt paving mixtures and blocks, 5.1% and 10%; and hot-rolled steel bars, plates and structural shapes, 11% and 23%."

For a copy of Simonson's inflation data, click PPI for construction materials and components.

Simonson also gathered some interesting anecdotal information about the effect of rising prices. From his recent Data Digest report:

"Readers have sent in many announcements of price increases since PPI data was gathered in mid-May. A Chicago-based contractor received notices on June 16 of an August 1 increase in asphalt prices that ‘is projected to be $10-12 per ton...but could possibly go higher' and a July 1 increase in drywall prices of ‘approximately 10%.' A Memphis-based contractor wrote on June 13, ‘our AC [asphalt cement] prices went to $550 today and we were told to expect $600 next week. Also indicated that we should be bidding $700 for the rest of the year (sigh).' The high prices for scrap steel have led to thefts of steel from construction sites. The Chicago Tribune reported on June 2, ‘state police were monitoring areas of the Reagan Tollway at 9 p.m. Sunday because of recent reports of stolen materials from Tollway construction sites,' an assistant state's attorney said. ‘Police said they [arrested two men whom they saw] loading a rental truck with 17 steel forms, worth an estimated $5,000...both men told police that they believed the materials were scrap.'

To read Simonson's weekly reports on the AGC of America website, click Data Digest.

As reported by the Association of Washington Business, this long awaited decision, Chamber of Commerce v. Brown, ought to tamp down the top legislative priority of unions here in Washington to establish a broader prohibition on employer speech than what even California envisioned. Indeed, Governor Gregoire cited the pending decision of the court in this case as the primary reason for asking the labor side to withdraw its bill in 2008.

Writing for the majority, Justice John Paul Stevens -- conventionally thought to be the most liberal of the high court justices -- held that the federal labor policy contained in the National Labor Relations Act (NLRA) preempts the attempt of California to impose a rule that prohibits employers receiving state funds from using the funds "to assist, promote, or deter union organizing."

The NLRA preemption doctrine that captured the court's attention forbids states from regulating conduct "that Congress intended to be unregulated because left to be controlled by the free play of economic forces." Noting its view under prior case law that "Congress struck a balance of protection, prohibition, and laissez-fair in respect to union organization, collective bargaining, and labor disputes," the court determined California's law attempted to regulate within "a zone protected and reserved for market freedom."

The court further elaborated on the inherent right of employers to engage in "free debate on issues dividing labor and management", that this First Amendment right is enshrined in the NLRA, and that it reflects a policy decision "favoring uninhibited, robust, and wide-open debate in labor disputes" involving "freewheeling use of the written and spoken word." The constitution, buttressed by the NLRA, provides this freedom; states cannot by legislation or regulation take it away.

The state AFL-CIO proposal in Washington is broader than the invalid California law. It doesn't hinge on the receipt or use of state funds by an employer. It bluntly prohibits any employer speech about union matters if it can be viewed as a "required" communication -- in a staff meeting, perhaps in a company-wide e-mail, and so on. It is enforced (like California's statute) by a strong litigation deterrent attempting to make the state's judicial branch the ultimate referee of permissible workplace speech.

But the high court was clear today: States are not free to regulate what Congress left unregulated in the NLRA. "When Congress has sought to put limits on advocacy for or against union organization, it has expressly set forth the mechanisms for doing so." The law "calls attention to the right of employees to refuse to join unions, which implies an underlying right to receive information opposing unionization." And the NLRA "expressly precludes regulation of speech about unionization" so long as the communications do not threaten or promise anything to the employee.

Our state unions may be busy between now and the 2009 legislative session testing arguments to distinguish their proposal from California's overreach. But today's decision should put an end to Washington's union neutrality bill.

Washington law continues to protect prime contractors from claims by employee benefit trust funds against general contractors' payment bonds or retainage funds when subcontractors fail to pay their trust fund contributions.

In 1994 in Puget Sound Electrical Workers Health & Welfare Trust Fund v. Merit Co., the Washington State Supreme Court ruled that the employee benefit trust funds that are owed contributions by subcontractors do not have rights against a general contractor's bond or retainage. Then, in 2000 in IBEW Local No. 46 v. Trig Electric Constr. Co., the Supreme Court reaffirmed its ruling that these trusts do not have the right to come after general contractors (and their bonds or retainage funds) for any unpaid amounts.

Recently, these trusts geared up in an effort to get the Supreme Court to overturn its previous two decisions and allow for trust funds to go after general contractors' bonds and retainage funds for unpaid amounts. In the case of Berschauer/Phillips Construction Co. v. Masonry Security Plan of Washington, employee benefit trust funds (the "Mason Trusts") filed liens against Berschauer/Phillips' bond and retainage for amounts that a subcontractor apparently had not paid.

Rather than simply allow the Mason Trusts to bulldoze it, local general contractor Berschauer/Phillips Construction Company took the fight to the Mason Trusts. Upon receiving notices of claims of lien against its payment bond and retainage funds by the Mason Trusts, Berschauer/Phillips - represented by Stanislaw Ashbaugh - sued the Mason Trusts in a Washington State Superior Court, asking the Court to declare the Mason Trusts' lien claims legally invalid. The trial court granted Berschauer/Phillips' request. The Mason Trusts then appealed, and the Washington State Court of Appeals quickly affirmed the trial court's ruling. At this point the Mason Trusts decided to try and put the issue before the Washington State Supreme Court for the third time in 14 years.

Because the Washington State Supreme Court is not required to hear any cases but rather chooses which cases it deems worthy of Supreme Court review, Berschauer/Phillips fought to keep the case out of the Supreme Court. These efforts were successful. The Supreme Court recently declined to review the case, and in doing such erased any doubt that Merit and Trig will continue to be the law of the land in Washington State. This was a great win for general contractors because it means that Washington state law continues to protect general contractors and their payments bonds.

In terms of what this means in everyday practice, general contractors should continue to closely monitor whether employee benefit trust funds are filing notices of lien claims against their payment bonds and retainage funds. Upon receipt of a lien claim, a general contractor should immediately contact its attorney to determine whether to immediately initiate a lawsuit in state court rather than allow the trusts to initiate a lawsuit in federal court. If given the opportunity, the trusts may try to sue the general contractor and its bond and retainage fund in federal court because the law in federal court is far friendlier to the trusts. The trusts know that if they have to litigate in state court, they are likely to lose because of the Supreme Court's decisions in Merit, Trig and, most recently, its decision not to readdress the holdings of those earlier decisions. Therefore, the contractor's goal frequently is to make sure any lawsuit occurs in state court, and the best way to ensure this is to act quickly.

So, general contractors continue to be protected under Washington state law in lawsuits by employee benefit trusts for unpaid amounts, but to benefit from these protections the general contractors must make sure that the lawsuits are fought in state court.

This article was provided by the AGC Legal Affairs Committee. Jesse Miller is a lawyer at Stanislaw Ashbaugh and focuses his practice on Construction Law. Contact him at jmiller@lawasresults.com.

Voluntary quits are an issue in unemployment insurance because the historical purpose of the system is to provide a social safety net with partial wage replacement for a temporary period that an individual is unemployed through no fault of his or her own, and is able, willing, and looking for work. Allowing benefits for individuals who choose to quit work runs afoul of that purpose.

But in a landmark 2003 compromise bill, the Legislature specified ten (and in 2008 added an 11th) clear reasons why a voluntary quit may still result in benefit eligibility. Things like relocation of a military spouse, protection of family from domestic violence, certain substantial reductions in pay or hours, and so on. This was the other half of legislation that fundamentally altered the collection of UI taxes from employers and addressed other benefit costs. It was part of a business-labor compromise brokered by then Gov. Gary Locke and set against the backdrop of serious economic competitiveness concerns and the state's efforts to win assembly of Boeing's new commercial airliner.

This will likely be an administrative nightmare for the Employment Security Department both going forward and, potentially, having to reassess benefit claims since 2003 that were turned down because the voluntary quit did not fall within one of the ten reasons.

The UI system has already become a hot topic for the 2009 Legislature because of a US Department of Labor determination that the Employment Security Department's tax collection system is out of conformity with federal law -- a problem the Legislature must fix.

Now, on the benefit side, today's decision elevates the voluntary quits issue to a similar prominence as the Department, stakeholders, and Legislature figure out whether, and how, to pick up the pieces.

For the rulemaking time-line and employer requirements from the effective date of the legislation (June 12) and the establishment of final rules in October, please click document link below to see L&I's Extra-Territorial Rules for Workers' Compensation Coverage.

Passage of this law, which helps level the playing field for Washington contractors when they are bidding for out-of-state work, was a top legislative priority for AGC this year. AGC helped lead the effort to resolve the double payment issue and last year convinced L&I to craft legislation for consideration in 2008. The result was a collaborative process among the Department, AGC and other business groups, and labor that led to the idea of a credit.

Generally, employees of Washington employers injured while working in another state are entitled to workers' compensation if the injured worker would have been entitled to compensation had the injury occurred here in Washington state. However, in some cases, the other state may require Washington employers to pay workers' compensation premiums for the work done in the other state.

"Employers are unclear as to the requirements of providing coverage, and this lack of clarity leads to situations where employers are paying twice for the same exposure," said AGC's Rick Slunaker in testimony to the House Commerce and Labor Committee. "This bill helps clarify the issue, lowers costs and simplifies regulations for Washington contractors with out-of-state projects."

Washington State has reciprocal agreements with certain states that theoretically should prevent the double payment of premiums. For example, Washington's agreement with Oregon says, "Employers shall be required to secure the payment of workers' compensation benefits under the workers' compensation law of the state the contract of employment arose in, and pay premiums or be self-insured in that state for the work performed while in the other state; and workers' compensation benefits for injuries and occupational diseases arising out of the temporary employment in the other state shall be payable under the workers' compensation law of the state the contract of employment arose in, and that state's law provides the exclusive remedy available to the injured worker."

Washington has similar agreements with Idaho, Montana, Nevada, Wyoming, North Dakota and South Dakota.

However, the confusion arises over the definition of "temporary employment," so even in those states with which Washington has an agreement, contractors end up paying twice. The legislation defines "temporary," making it easier for contractors to eliminate the double premiums.

The legislation (Senate Bill 6839) says that Washington employers who are not self-insured must obtain workers' compensation coverage from the Washington State Fund for temporary and incidental work performed by their employees on jobs in another state. Temporary and incidental means work performed in another state for 30 days or less per calendar year. The 30 day limit is aggregated for the company. It can be one worker for 30 days, 30 workers for one day each, or any other combination totaling 30 days in each state other than Washington. The practical application of this is that Washington contractors receive a credit for redundant premiums paid beyond 30 days.

For questions or comments regarding this legislation, contact Rick Slunaker at 360-352-5000 or rslunaker@agcwa.com.

Job Title: Southern District Manager

Department: Southern District

Reports To: Executive Vice President

FLSA Status: Exempt

Grade: B

POSITION SUMMARY
This position is responsible for operating a district office of the association providing services to members in Pierce, Thurston, Lewis, Grays Harbor, Mason, Kitsap, Jefferson, and Clallum Counties by performing the following duties. Services include local government liaison, membership recruitment and retention, and coordination of educational and social events.

ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may be assigned.
• Identify and establish a recruiting program for potential association members and a retention program focused on retention of current members.
• Identify local government issues and coordinate district member interaction with local government entities. Innovate/negotiate solutions to sensitive industry issues.
• Act as industry spokesperson before local government agencies and, in coordination with the Communications Director, the media.
• Form and lead/participate in coalitions with other business groups to affect local government policies.
• Work with association leadership on political involvement that may include support of campaigns, including fundraising, for candidates and/or issues.
• Coordinate an education program for the professional development of members and their employees.
• Prepare, recommend and monitor an annual district budget.
• Represent AGC on local civic and community boards where appropriate.

SUPERVISORY RESPONSIBILITIES
This position has supervisory responsibilities associated with it.

QUALIFICATIONS
To perform this job successfully, an individual must be able to perform each essential duty satisfactorily. The requirements listed below are representative of the knowledge, skill, and/or ability required. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

EDUCATION/EXPERIENCE
A Bachelor's degree (BA or BS) from a four-year college or university and six plus years related experience and/or training are required. An equivalent combination of education and experience may be substituted. Knowledge of the construction industry is preferred.

COMMUNICATION SKILLS
This position requires the following abilities: to read, analyze, and interpret common industry related journals, financial reports, and legal documents; to respond to common inquiries or complaints from customers, regulatory agencies, or members of the business community; to write reports and articles for publication that conforms to prescribed style and format; and to effectively present information to top management, clients, external groups, and/or boards of directors.

HUMAN RELATIONS SKILLS
The ability to inspire, motivate and influence the behavior of a highly diverse group of people in individual, group and large audience situations is critical to successful job performance. External groups may include citizens, businesses, governing boards, regulatory agencies, and local/state government. Convincing others and persuading them to decision or action in individual, group or large audience situations is essential and occurs on a continuing basis. This level may frequently use highly developed negotiation and mediation skills to resolve conflict and disagreements of a sensitive and financial nature.

LEADERSHIP SKILLS
Leadership responsibilities for entire departments and divisions requires the ability to step out of narrow group or team interests to facilitate and integrate group goals to the broader goals of the organization as a whole. Must inspire others through coaching, counseling, facilitating group processes, communicating organizational vision, gaining respect and having ideas accepted by others. The ability to establish consensus and build collaboration throughout the organization is essential and occurs on a continuing basis.

REASONING AND/OR CRITICAL THINKING ABILITY
Requires the ability to apply principles of logical or scientific thinking to a wide range of intellectual and practical problems. Work situations are vaguely defined, often unprecedented, and unique in character; problems are very complex, abstract, conceptual, and long-term in nature; and there is a continual requirement for strategic, innovative thought and synthesis of information as it pertains to work situations.

COMPUTER SKILLS
Requires a demonstrated operating knowledge of computers including an intermediate level ability with Word, Excel and other required software programs and an ability to understand network operations.

PHYSICAL REQUIREMENTS AND WORK ENVIRONMENT
The work environment characteristics described here are representative of those an employee encounters while performing the essential functions of this job. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

This position requires the manual dexterity sufficient to operate phones, computers, and other office equipment. This person must speak clearly using the English language to accurately convey information and be able to hear at normal speaking levels both in person and over the telephone. Vision correctable to 20/40 is required to review written materials

Generally good working conditions with little or no exposure to extremes in noises, temperature. Little or no safety or health hazards. Minimal lifting or climbing; work performed in an office setting.

This job description does not imply that these are the only duties to be performed. Employees occupying this position will be required to follow any other-related instruction and to perform any other job related duties requested by their supervisor.