SACRAMENTO — The following article was written for CAL SMACNA members by William C. Last, Jr. and Patrick J. Whitehorn. Mr. Last is an attorney who has been specializing in Construction Law for over 40 years.
Safely Navigating Vaccine Mandates on Construction Sites and Steps Contractors Can Take to Minimize Risk
High rates of unvaccinated workers in California’s construction industry pose a risk to contractors as public and private project owners begin to adopt strict vaccination requirements at jobsites. This article is intended to increase contractor awareness of the issue, as well as, educate contractors on steps they can take to minimize risk.
Recently there have been a number of significant changes with regard to mandatory Covid-19 vaccinations and these are increasingly impacting construction jobsites. The City and County of San Francisco has mandated vaccines for all of its employees and has mandated proof of vaccination for entry to some high-contact indoor businesses and for indoor events attended by more than 1,000 people. In addition, as of July 29, 2021, Executive Order No. 13991 was issued by the Federal Government regarding federal workplace safety principles intended to combat increasing COVID-19 infections and hospitalizations. Executive Order No. 13991 requires that all fully vaccinated contractors working in federal buildings and installations, which includes all federal government offices, federal courthouses, military bases and buildings, and land subject to the jurisdiction of any federal agency, must sign an attestation confirming their vaccination status. Persons who are unvaccinated or who will not sign an attestation will be required to wear a mask, maintain social distancing, and weekly or twice-weekly Covid-19 testing. With increasing number of jurisdictions requiring vaccination under certain circumstances, steps should be taken when faced with a mandate that all persons on a project be vaccinated.
To be clear, no Union has mandated vaccinations, nor are they able to mandate vaccinations, vaccinations have not been part of collective bargaining agreements. The following is a discussion of important steps a contractor should take if vaccines are mandated by a project owner.
Public Works Projects:
At this time there is no Federal, State or Local mandate requiring private employers to enforce a vaccination requirement for its employees. Currently, the California State mandates apply to healthcare workers and educators, and the City and County of San Francisco and Federal Mandates apply only to City and County or Federal Employees. The Federal Mandates actually allow for unvaccinated employees of contractors to remain working on federal projects as long as they comply with social distancing, masking, and testing requirements. It does however, appear that the California State University System is requiring construction workers on their job sites to be vaccinated and other public agencies may follow suit. At this time there are no State or Local bills moving forward to mandate vaccination for all public works projects. However, this could change.
The owner of a private work of improvement has the right to control access to their property and thus the right to require anyone working on their property follow health and safety guidelines established by the owner. These health and safety guidelines can include social distancing, mask requirements, testing, vaccination, and other protocols intended to keep all workers on site safe and stop the spread of the virus. Several private owners and developers have already released schedules and deadlines where vaccinations will be mandatory to work on their projects.
Vaccine Mandates Prior to or During Contract Formation:
If a project owner advises that it intends to limit access to its project site to solely vaccinated workers, you will need to take that into consideration in your contract terms. How does that effect your staffing levels, and general conditions? Will such a requirement increase your labor costs? Will it mean that you have less available labor for the project? If so, what effect if any will this have on your projected schedule and completion deadlines?
Vaccine Mandates After Contract Formation – Steps you can take to minimize risk:
If you were provided notice of a vaccine mandate after contract formation you will want to review your contract, taking particular notice of the Force Majeure, Time, Delay and Material and/or Labor Escalation Clauses. If you believe that you will be impacted by the vaccine mandate you should send a formal notice of the impact. This is not an adversarial notice. Your contracting party will understand the impacts experienced and should appreciate the proactive approach in communicating the COVID-19 vaccine mandate impacts. Providing the formal notice creates a structure that is helpful in creating a productive communication pathway regarding the delays/costs incurred and ways to mitigate them. Take notice of any contractually required formats for your notice, including to whom and how the notice is to be provided.
Explain the contractual grounds for your request. Are you entitled to a time extension? The AIA, ConsensusDocs, and governmental contracts all have force majeure and/or time extension provisions that permit extensions of contract time. Section 8.3.1 of the AIA A201 permits time extensions for “causes beyond the contractor’s control.” Section 6.3 of ConsensusDocs 200 similarly provides an extension of time for “any cause beyond the control of the Constructor.” Emphasize in your notice letter that the delays caused by the COVID-19 pandemic and the vaccine mandate. Delay Costs, the language of your contract may or may not permit you to recover costs. Be as specific as possible regarding the costs incurred or anticipated additional costs and commit to providing an update regarding the costs and provide periodic updates. If you collect and provide that information as it is being developed, you will avoid surprises and also engage your contracting party to participate in cost mitigation efforts. Your contract may also have particular provisions regarding increased material costs. If it does not and you expect increased material costs, include that in your notice letter. Your notice can be short and concise (1-2 pages). It should be plainly written and provide what updates will be given. If you do not have a specific impact to performance at this point, it would be wise to give a notice of a potential delay to start the discussion.
As most Unions have not mandated vaccinations for their members, the most significant issue to arise out of any vaccine mandate is likely to be labor shortages if the Union cannot provide enough vaccinated members to staff all projects under vaccine mandates. The change in labor availability resulting from a vaccine mandate will be a changed condition, and will likely result in scheduling and project delays. It is important to note that AIA, ConsensusDocs, and governmental contracts usually call for a party to provide notice of changed conditions when they are discovered. For example, AIA A201-2017 §3.7.4 requires a party to provide notice to the owner within 14 days of discovery of a concealed or unknown condition. Make sure that notice, as required in your contract, is given regarding the changed conditions.
Once you have provided notice of expected delays, increased costs, and/or notice of changed conditions, keep track of your actual increased costs, for labor, for materials if appropriate, and any time and delay impacts incurred. When you know the extent of the impacts of the vaccine mandate, submit a change order to your contracting party, whether that be the owner, the general contractor, or another sub.
Your proposed change order should address the vaccine mandate as a changed condition. If you are delayed or subject to increased costs, you should be entitled to a change order to compensate you for this change by the owner. Make sure your change order requests compensation for both increased costs and any resulting increased time. If applicable, cite to any force majeure or cardinal change clause in your contract in support of your requested change order. Should any change order for costs and time resulting from the vaccine mandate be rejected, make sure you strictly adhere to your contracts claim requirements when submitting a claim based on the rejection of the change order.
This article, ©2021, was written by William C. Last, Jr. and Patrick J. Whitehorn. Mr. Last is an attorney who has been specializing in Construction Law for over 40 years. In addition to belonging to a number of construction trade associations, Mr. Last holds a California “A” and “B” license. Mr. Last has been designated as a Super Lawyer and a Fellow, Construction Lawyers Society of America. Mr. Whitehorn has been practicing construction, and commercial litigation for over fifteen years. Both can be contacted at 415-793-7411 or 650-696-8350. A number of his past articles can be found on his website: lhfconstructlaw.com. This bulletin is published periodically to provide general information about current legal issues. The articles are not intended to be a substitute for the advice of an attorney as to a specific problem. If you have a specific legal question or need legal advice, you should contact an attorney.