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ABC Newsline
On April 23, the Federal Trade Commission voted 3-2 to issue its final rule to ban noncompete clauses. The rule is effective Sept. 4, 2024.
According to the FTC, under the new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives can remain in force, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them.
ABC issued a news release opposing the rule:
“The final rule to ban all noncompete agreements nationwide—except existing noncompetes for senior executives—is a radical departure from hundreds of years of legal precedent,” said Ben Brubeck, ABC vice president of regulatory, legal and state affairs. “Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts—including construction project contracts—around the country that are beneficial for both businesses and employees.”
ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. This new rule will have a harmful effect on their companies as well as their employees, forcing companies to rework their compensation and talent strategies.
FTC Resources on the Final Rule:
To learn more about the final rule and what happens next, read ABC general counsel Littler Mendelson’s analysis.
In April 2023, ABC submitted comments in opposition to the FTC’s unprecedented proposal to ban noncompete agreements. ABC also joined the U.S. Chamber of Commerce and 280 business groups in submitting comments urging the FTC to rescind the proposed rule.
The final rule is currently being litigated. Continue to monitor Newsline for updates.
On May 1, the Council on Environmental Quality issued its final rule on National Environmental Policy Act Implementing Regulations Revisions Phase 2. The final rule implements wide-ranging changes that will add unnecessarily burdensome and costly provisions to the federal environmental review and permitting process.
ABC issued a statement on the release of the final rule:
“These unnecessarily onerous new NEPA regulations will make it more difficult to build important projects and are a major step backward for critical infrastructure, the construction industry and America’s economic future,” said Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “While both Republicans and Democrats have long agreed on the need for commonsense permitting reform, this final rule fails to meaningfully improve environmental protections and actually expands and lengthens environmental reviews that already take years.”
The final rule reverses important streamlining provisions of the ABC-supported 2020 NEPA rule and adds new layers of complexity to the NEPA process, including by doing the following:
Additionally, the final rule favors projects deemed to have environmental benefits (such as solar/wind energy, electric vehicle charging facilities and electrical transmission infrastructure) by allowing them to receive categorical exclusions that bypass the NEPA process.
Further information on the final rule is available in the White House’s press release. The final rule takes effect July 1. Federal agencies have until July 1, 2025, to implement the regulations into their own environmental review procedures.
On April 23, the U.S. Department of Labor issued its final rule on overtime, which will change overtime regulations under the Fair Labor Standards Act. The final rule increases the minimum annual salary level threshold for exemption in two phases: from the current level of $35,568 to $43,888 on July 1, 2024, and to $58,656 on Jan. 1, 2025. In addition, the threshold for highly compensated employees will be increase from the current threshold of $107,432 to $132,964 on July 1 and then to $151,164 on Jan. 1. Further, salary thresholds will update every three years starting on July 1, 2027.
“ABC appreciates that the DOL recognized the value in retaining the methodology used by the prior administration in the 2019 overtime rule update for the phase I increase,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Regrettably, the DOL decided to use a new methodology for phase II, which results in a 65% increase to $58,656 from the current threshold only nine months from now—further complicating the current economic outlook. Multiple industries, like construction, are grappling with uncertain economic conditions such as inflation, supply chain disruptions, high materials prices and workforce shortages, all of which push operational costs ever higher. Specifically, ABC estimates that the construction industry must hire more than half a million additional workers in 2024 to meet demand.”
“Virtually all of ABC’s members employ workers who qualify for exempt status, and phase II of the final rule will reclassify huge numbers of these employees as nonexempt,” said Brubeck. “This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities. These issues will recur repeatedly because the DOL rule will automatically increase the salary level every three years beginning in 2027. Additionally, the rule’s significant increase in the salary level threshold fails to account for disparate income levels in different regions of the country.
“ABC will consider all options, including a legal challenge, against this final rule,” said Burbeck.
DOL resources on the final rule:
Additionally, read ABC general counsel Littler Mendelson’s analysis of the overtime final rule.
On Nov. 7, 2023, ABC submitted comments to the DOL in response to the proposed rulemaking, calling on the DOL to withdraw it. ABC also signed onto coalition comments criticizing the overtime proposed rule, joining 244 national, state and local organizations representing employers from a wide range of private industry and public, nonprofit and education sectors.
Continue to monitor Newsline for further updates.
On April 22, the Federal Acquisition Regulatory Council published a final rule, Federal Acquisition Regulation: Sustainable Procurement, with the stated goal of restructuring and updating existing requirements for sustainability in federal procurement. The rule was first announced in an April 19 White House press release.
The final rule reorganizes and implements changes to FAR part 23, with key provisions that:
The FAR Council also released a Small Entity Compliance Guide. The final rule will take effect May 22.
On April 18, the U.S. Department of Labor’s Mine Safety and Health Administration issued the final rule on Lowering Miners’ Exposure to Respirable Crystalline Silica and Improving Respiratory Protection, which lowers the permissible exposure limit of respirable crystalline silica to 50 micrograms per cubic meter of air for a full-shift exposure, calculated as an eight-hour, time-weighted average. If a miner’s exposure exceeds the limit, mine operators are required to take immediate corrective actions to come into compliance.
The final rule will take effect on June 17, 2024. Coal mine operators have 12 months to come into compliance with the final rule’s requirements while metal and nonmetal mine operators have 24 months to come into compliance (including medical surveillance). Read MSHA’s fact sheet on the rule.
ABC, as a steering committee member of the Construction Industry Safety Coalition, submitted comments on the proposed rule, stating, “While the CISC supports MSHA’s efforts to protect mine workers from overexposure to crystalline silica, the coalition requests that MSHA exempt construction activities conducted on MSHA sites. Construction activities are currently covered under the Occupational Safety and Health Administration’s final rule addressing exposure to crystalline silica (‘silica standard’). Having to comply with two different sets of rules is confusing, duplicative and unnecessary, especially when compliance with the OSHA silica standard has proven effective for construction operations.” CISC urged MSHA to develop a Table 1, like the one found in the OSHA silica standard, so that the industry has clear-cut standards and options for complying with the MSHA rule.
CISC’s comments further stated, “Our internal review of such exposure data indicates that most if not all job tasks in those surface quarrying operations are incapable of exceeding the proposed PEL. We therefore request MSHA review such data and produce a report for review and comment.”
MSHA did not include CISC’s recommendations in the final rule, instead determining that a Table 1 approach does not adequately protect miners, due to the diverse range of activities involved in mining, and constantly changing mining conditions.
According to OSHA, in addition to reducing exposure limits, the final rule does the following:
To learn more about the final rule visit MSHA.
On April 19, the U.S. Equal Employment Opportunity Commission issued a final rule to implement the Pregnant Workers Fairness Act, which has been in effect since June 27, 2023. As the EEOC explains, the PWFA requires most employers with 15 or more employees “to provide a ‘reasonable accommodation’ to a qualified employee’s or applicant’s known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an ‘undue hardship.’” The final rule goes into effect on June 18.
The final regulation provides guidance on what constitutes a limitation under the PWFA, reasonable accommodations, employee-employer communication practices and when accommodations may impose an undue hardship on an employer. It also provides information on employer defenses or exemptions, such as those based on religion.
In December 2022, the PWFA was signed into law as part of H.R.2617, the Consolidated Appropriations Act, 2023. Specifically, the PWFA requires that employers provide reasonable accommodations to workers with qualifying limitations and prohibits employers from denying employment opportunities because of the need for accommodations, retaliating against employees for requesting accommodations and forcing employees to take leave when an accommodation is possible.
ABC’s general counsel, Littler Mendelson, states the following in its analysis of the final rule, “Employers should become familiar with the final regulations and the examples of reasonable accommodation in the EEOC’s interpretive guidance to better understand their obligations under the PWFA and how the EEOC will be interpreting and enforcing it in specific cases. Employers also may want to work closely with counsel to update any pregnancy accommodation policies and related forms to ensure that they comply with the final regulations.”
EEOC Resources:
To learn more, visit eeoc.gov and see ABC general counsel Littler Mendelson’s publication on the rule.
On Feb. 27, the U.S. Environmental Protection Agency published a notice and request for comment regarding authorization of new California regulations requiring drastically lowered emissions for locomotives operated on railways within the state.
The regulations, implemented by the California Air Resources Board, state that all locomotives in California must be zero-emission models by 2030. To date, no such commercially viable zero-emission locomotives exist. The enormous cost of compliance with this regulation would likely have national impacts on the railway system, creating new logistical challenges for a key part of the supply chain and potentially leading to significantly increased construction material prices. The Washington Legal Foundation’s advisory notice provides additional details on the regulation.
Under the Clean Air Act, the EPA must approve CARB’s regulations before they can be finalized. ABC plans to join a coalition of industry stakeholders in comments opposing CARB’s regulations and urging EPA to deny the request.
ABC members can take action to oppose these overreaching regulations by submitting comments through the Association of American Railroads’ grassroots portal before the April 22 comment deadline.
On April 9, the U.S. House of Representatives passed the ABC-supported H.R.6655, A Stronger Workforce for America Act, in a 378-26 vote. Ahead of the House floor consideration, ABC sent a letter in support of the legislation. “Since its passage in 1998, WIOA has been a crucial asset to the construction industry, aiding in securing funds for workforce development efforts and assisting those seeking new jobs and employment. However, since WIOA’s bipartisan reauthorization in 2014, the construction industry has faced new challenges and a workforce shortage that has left many contractors throughout the country in desperate need of qualified, skilled craft professionals,” the letter noted. “To ensure the workforce is equipped to meet industry demand, ABC is committed to pursuing policies and legislation like H.R. 6655 that address these unique challenges.”
According to a press release by the Committee on Education and the Workforce, “This bipartisan legislation makes critical improvements to the Workforce Innovation and Opportunity Act (WIOA) that will expand the skills development provided under the law, strengthen the relationship between employers and the workforce system, and put more Americans on the pathway to successful careers.”
A Stronger Workforce for America Act reauthorizes the Workforce Innovation and Opportunity Act for the first time in nearly a decade and promotes America’s economic competitiveness. Most critically for ABC, H.R. 6655 supports an all-of-the-above approach to work-based learning and seeks true modernization and bipartisan input to support WIOA’s success.
The Biden administration continues to roll back Trump-era initiatives and institute new, pro-union policies that challenge ABC members’ ability to win work. ABC continues to fight against these proposed rules and regulations affecting merit shop contractors and advocate for open competition and free enterprise.
ABC’s Regulatory Roundup is updated on a regular basis and includes information about federal regulations, guidance and compliance materials from the U.S. Department of Labor, U.S. Department of the Treasury, Federal Acquisition Regulation Council, National Labor Relations Board, Federal Trade Commission, Environmental Protection Agency and Council on Environmental Quality.
Read ABC’s April Regulatory Roundup to learn more about the latest developments affecting the construction industry.
On April 1, the U.S. Department of Labor issued an updated version of its Prevailing Wage Resource Book. The resource provides an overview of prevailing wage requirements under the Davis-Bacon and Related Acts and Service Contract Act. The updated guide incorporates changes to Davis-Bacon regulations that came into effect on Oct. 23, 2023, under the August 2023 final rule.
The final rule made drastic revisions to the Davis-Bacon Act and Related Acts regulations that apply to federal and federally assisted construction projects funded by taxpayers. These regulations require contractors on covered projects to pay prevailing wages determined by the DOL’s survey process. Unfortunately, the rule reversed important reforms that were established by the Reagan administration and increased the inaccuracy of Davis-Bacon wage determinations.
On Nov. 7, 2023, ABC filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging the final rule, asserting that it violates numerous federal statutes and violates principles of fair and open competition on federal and federally assisted construction projects. Further updates will be provided in Newsline as the case proceeds.
ABC offered a members-only webinar on the final rule on Aug. 21, 2023. More information and resources are available on ABC’s website at abc.org/davisbacon.