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Andrews Myers
Business Insight from the Ground Up
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Construction
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Staying Cool in a Hot (Construction) Market
by Clayton Utkov   By all accounts, the Texas construction market is hot. In both horizontal and vertical construction, new projects are coming online at a rapid pace. As a result, contractors are busy building current projects and signing up their next projects. This can be great for the construction industry but there are also dangers that should be recognized. Recognition of some common pitfalls will, hopefully, allow contractors to minimize their exposure to these potential risks. Some risks include: (1) entering into contracts with unfavorable terms, (2) hiring unqualified employees and/or subcontractors, (3) overcommitting company resources, or (4) allowing insufficient time to properly protect the business.  Read more...
City Council Passes Revised Tax Abatement Ordinance to "Improve the Work Quality of Construction Workers"
by Ben Westcott    Although the City has had a tax abatement program for 20 years, the City Council found it necessary to make some significant changes in 2018, that will significantly affect the construction industry. The city claims the rules are “substantially unchanged,” but you can read it here and decide for yourself. Developers and contractors should be aware that the new ordinance requires applicants to provide evidence they will:  (1.) Make good faith efforts to hire a minimum of 25% of the total labor force for construction and non-construction job requirements from a census tract with a poverty rate that exceeds that of the city (regardless of qualification); (2.) Make good faith efforts to hire a minimum of 25% of the total labor force for construction and non-construction job requirements from the same census tract as the project or an adjacent census tract (regardless of qualification); and (3.) Make good faith efforts to hire a minimum of 30% of its construction workforce from a local DOL certified apprenticeship program (non-union training programs are excluded).  Read more...
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Texas Officials' Recent Actions to Impact Post Harvey Construction Projects and Housing Developments
by Kenton Andrews   There has been a flurry of activity this month from Texas officials dealing with the potential funding and planning of construction projects and relief related to areas impacted by Hurricane Harvey.  This is especially true for the Houston area. This activity includes Governor Greg Abbott’s decision to approve the Harris County Commissioner’s request to hold a special election for a bond referendum where citizens would be tasked with approving the financing of flood-control projects within the county. There is still scant detail on the exact types of projects that would be funded by the proposed bond proceeds, but Harris County Judge Ed Emmett stated there would be “hundreds” of diverse projects if approved. The exact list and exact dollar amount to be voted on is still being finalized, but the expected asking price is believed to be approximately $2.5 billion. This bond election is set for August 25, 2018, which also coincides with the one year anniversary of Hurricane Harvey.  Read more...
Real Estate
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Negotiating Pipeline Easements in Texas
by Scott McKaig   Texas has the largest pipeline infrastructure in the country, with more than 439,000 miles of pipeline crisscrossing the state.  With the recent uptick in new pipeline projects, landowners may find themselves being approached by pipeline companies seeking easements across their property to construct new lines.  The following issues are examples of matters a landowner should consider in negotiating such easements.  A landowner should confirm whether the pipeline company has eminent domain power.  Many pipeline companies have this power, which allows them to potentially take private property for a public use (in this case, for installing the pipeline), with adequate compensation to the landowner but without the landowner’s consent.  If the pipeline company does not possess eminent domain power, however, the landowner may be in a much stronger position in negotiating the landowner’s desired terms.  Read more...
Big Welcome to New Senior Associate Phillip Williams

Phillip Williams joins the firm's commercial real estate practice group where he is involved a wide variety of commercial real estate transactions, including the acquisition and disposition of investment-grade property, commercial development, office, industrial, and retail leasing, and a broad range of financing transactions.

Phillip also works on corporate matters related to real estate transactions, including the formation of business entities, the negotiation of joint ventures, corporate governance, and other real estate-related commercial transactions.  Click here for more information on Phillip Williams.
Carson Fisk Re-Elected Chair, City of Austin Construction Advisory Committee
Carson Fisk  will chair the city council-appointed, eleven-member committee, as they are tasked with monitoring enforcement of prevailing wage scales and job classifications, and advising the city council and city manager regarding
construction matters affecting the quality, cost, and improvement of municipal construction programs. For more information on the CAC, click here
Employment
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Is Your Handshake Deal a Potential Anti-Trust Violation?
by Andy Clark and Tony Stergio   In the construction industry, general contractors, subcontractors, and their employees often work in close quarters in order to complete a job. When contractors find themselves working alongside one another on a frequent basis, they may be tempted to agree not to poach each other’s employees – by setting similar wages, by not soliciting or hiring the other’s employees, or by sharing what kind of wages and benefits they’re paying.  In October 2016, the Department of Justice (DOJ) issued “Antitrust Guidance for Human Resource Professionals,” explaining how antitrust law might apply in these kinds of situations – and threatening severe consequences for companies that unlawfully engage in anti-competitive behavior.  Read more...
Are They Really a Summer Intern or an Employee?
by Brittany Cooperrider   The end of the school year is here. For many, that means graduations, vacations, and all things summer. For businesses, summer may include hosting student interns. The Department of Labor has guidelines for employers to utilize in determining whether their interns are actually considered employees under the Fair Labor Standards Act (“FLSA”) and must be paid for their work.  These guidelines have changed a number of times over the years, most recently in January 2018. Courts and the Department of Labor are utilizing the “primary beneficiary test” to analyze whether a student intern is actually an FLSA employee entitled to compensation. The factors that are taken into consideration in the primary beneficiary test are:  (1.) The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa. Read more...
Supreme Court Upholds Workplace Arbitration Contracts Barring Class Actions
by Andy Clark   In a May 21st decision, the Supreme Court held that an employee may agree to arbitrate his or her disputes individually (and may also waive the right to resolve disputes through class or collective action proceedings), even in wage-and-hour cases. Given the Court’s decision, this is a good time for employers to consider limiting their exposure to class action claims by implementing arbitration programs with their workforces.  Read more on how this decision impacts oilfield operators and service companies, a group highly targeted by FLSA filings, in our Energy section further below. 
Bankruptcy
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Agreed Judgment
by Julia Bennett-Jean   Most times you are able to reach an agreement with a customer that owes you money. No matter what kind of agreement is reached in a dispute, it is always important to memorialize the terms of your agreement in a written Settlement Agreement.  However, an additional and good measure of ensuring the payment of your claims is to secure your settlement agreement with an Agreed Judgment.

An Agreed Judgment is a judgment signed by the debtor, which acknowledges the debt owed, that can be filed with the court in the event the debtor fails to pay pursuant to the Settlement Agreement. There are two main benefits of securing a settlement with an Agreed Judgment: it’s cheaper and faster. With a signed Agreed Judgment in hand, all one has to then do is file both the lawsuit and Agreed Judgment, eliminating the need for a long drawn out discovery with costly document production and/or time-consuming depositions. There will be no trial. The judge signs the Agreed Judgment and you can immediately start collecting your monies owed. 
Bob Plessala Presents of First Breach Issues to HBA Construction Law Section
Robert "Bob" Plessala recently presented "Life's a Breach - First Breach Issues," to the Houston Bar Association Construction Law Section.  The supporting paper can be found here. 
Introducing Our Houston Summer Law Clerks 
We recently welcomed three summer law clerks this week at a firmwide welcome breakfast in Houston.  Joining us for the summer are: Mahek Bhojani, University of Houston Law Center; Patrick Kelly, Baylor University School of Law; and Chris Scheurich, South Texas College of Law.
Congratulations to first year construction law associate, Manny Schoenhuber, on recently passing the Texas Bar!


 
Upcoming June Events
 
June 7 - Elaine Howard presents "Resolving Boundary Disputes" at Halfmoon Education Seminar
June 27 - Katy Gray, Brittany Cooperrider, Poston Pritchett and Colby Hodges conduct a panel discussion on "Strategies for Initial Phases of a Dispute," for ABC Young Leaders
Energy
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Supreme Court Ruling Affords Oil Patch Companies some Relief from FLSA Filings
by Champe Fitzhugh   A recent Supreme Court ruling upholds workplace arbitration contracts barring class action suits. In a 5 to 4 decision, the Supreme Court ruled that companies can use arbitration clauses to block employees from banding together in class action suits - this is an important win for oilfield operators and service companies who have been fighting an increasing number of these type suits.   The Fair Labor Standards Act (FLSA), the statutory guideline for the payment and classification of employees, is something that most companies in the oil patch have been forced to reckon with over the last 4 years. Determining the proper classification for personnel was tricky.  The size of the vehicles driven, whether state lines were crossed, whether personnel have sufficient autonomy on the jobsite, and many other factors mattered.  Without clear guidelines, many companies found themselves facing massive liability from large numbers of former workers – just the cost of assembling relevant evidence and preparing a defense seemed daunting.  Read more...
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