A Marion County Circuit Court judge has struck down Gov. Tina Kotek’s executive order requiring union-friendly project labor agreements.

Judge Thomas Hart ruled from the bench on Thursday that Kotek had exceeded her constitutional authority by effectively requiring project labor agreements be used for large infrastructure projects.

A coalition of contractors and industry groups sued Kotek in February 2025, charging that her executive order, issued in December 2024, unconstitutionally made law without the Legislature. The contractors alleged the rules illegally hindered open-shop firms.

Hart agreed, granting a preliminary injunction in March 2025, preventing the rules from taking effect. Thursday’s ruling is a significant victory for contractors, but Kotek could appeal the decision.

Kotek, in a statement issued on Friday, did not indicate whether she would appeal Hart’s ruling.

“We’re currently evaluating the court’s oral ruling,” she stated via email. “I continue to believe that this was the right policy for the state at the right time. I am resolved to continue to find pathways to encourage fair, living-wage jobs that meet the needs of Oregon families while our state grows.”

Contractors hailed the ruling. Laurie Kendall, interim president and CEO of the Associated Builders and Contractors‘ Pacific Northwest chapter, called the ruling a “big win for merit-shop contractors” in an email to members. She could not immediately be reached for comment.

Kotek’s executive order required project labor agreements to be used for state-funded projects when on-site labor amounts to 15 percent or more of project costs. The agreements, known as PLAs, typically mandate prevailing wages to be paid, but also prevent labor disruptions.

Contractors charge that PLAs raise costs for large-scale projects.

ABC was joined in the lawsuit by the Associated General Contractors‘ Oregon-Columbia chapter, the Northwest Utility Contractors Association, the National Federation of Independent Business, and more than a dozen Oregon contractors.

The plaintiffs were represented by Joshua P. Dennis of Schwabe, Williamson & Wyatt, Angela Otto of Dunn Carney, D. Brent Carpenter of Jordan Ramis and Darien S. Loiselle of Sokol Larkin. The governor was represented by the Oregon Department of Justice.

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As most construction contractors and subcontractors know, construction liens can provide important payment security and also the ability to recover attorney fees if they prevail in foreclosing their liens. In past articles, I have discussed some of the myriad of issues which can arise regarding liens, such as statutory notice requirements and lien recording deadlines.

Another issue that arises with some frequency is whether particular items included in a lien are “lienable” — that is, whether they are items which are allowed under the lien statutes.

Both Oregon and Washington lien statutes provide that a contractor or subcontractor shall have a lien for furnishing labor, materials and/or equipment on an improvement (i.e., a construction project). In Oregon, a contractor or subcontractor has the right to a lien for labor that adds value to the improvement, including wages and overhead. The lien may also include the cost of labor not performed on the project site if that labor is expended to fabricate goods to be incorporated into the project, like the fabrication of steel beams or wooden trusses. However, if the labor does not “add value” to the improvement, such as costs for demobilizing well drilling equipment when a project was terminated, it is not lienable.

Washington lien statutes define labor as the “exertion of the powers of body or mind performed at the site for compensation” which is performed on the project site. Thus, Washington law expressly limits “labor” for purposes of lien claims to labor performed on the project site. Case law limits what constitutes labor even further, holding that labor does not include construction management and administrative tasks, which the courts have found do not improve the property.

Regarding materials, in Oregon, a contractor or subcontractor has a lien for materials furnished to a construction project, provided that the materials become part of the project or are consumed by the project. Courts will generally make the assumption that materials delivered to a project site became part of or were consumed by the project. However, if the materials are not delivered to the project site, but instead to another location, the lien claimant must show that they were used to fabricate an item that is ultimately incorporated into the project, such as beams or trusses, which are fabricated specifically for the project.

In Washington, the materials must be intended to be incorporated into the project. Recognizing the difficult task a claimant would face if it had to prove that the materials it furnished were actually incorporated into the project, courts in Washington, as in Oregon, assume that if materials are delivered to the project site, they were incorporated into the project. Washington courts require that materials be furnished in good faith to be incorporated into the project, which means that delivery of materials that were not ordered will not provide or extend lien rights.

Provision of equipment is apparently straightforward in both Oregon and Washington, as only one case discusses the issue of the inclusion of equipment costs in a lien — a Washington case in which the court held that if the use of the equipment is merely incidental to labor, then a lien does not arise for the equipment.

The above illustrates that there are no bright-line rules about what is lienable and what is not. Courts must determine, on a case-by-case basis, whether the claimed items are lienable based on subjective criteria, such as whether the labor “added value” to the project. Thus, claimants are sometimes left guessing about what is lienable and what is not. So, what happens if a court determines that a lien contains lienable and non-lienable amounts and how can a claimant protect its lien rights? The answer depends on how detailed the lien is as to the amount claimed. In both Oregon and Washington, if the non-lienable items can be segregated from the lienable items, then the lienable portion of the lien will likely survive.

However, if the lien simply contains what is required by the lien statutes — which is simply the principal amount of the lien — it would likely be difficult to segregate out the non-lienable items. In other words, simply following the statute and stating the lien amount in a lump sum can leave the claimant’s lien rights in jeopardy. If a court is unable to segregate the non-lienable items, then there is a strong chance that the court will hold that the lien is invalid.

Further, owners have legal recourse, provided by statute, against a lien claimant for invalid liens. In Oregon, a lien claimant who “knowingly files” an invalid lien is liable to the owner for the greater of $5,000 or the owner’s actual damages, whichever is greater.

In Washington, an owner may bring an action under the state’s “frivolous lien” statute and a court may order the lien released if the owner proves that the lien is “frivolous and made without reasonable cause, or clearly excessive.”

In both states, a lien claimant whose lien is determined to be invalid is potentially liable to the owner for the owner’s costs and attorney fees incurred in challenging the lien.

Thus, while a lien provides valuable security, that security is not without risk. Fortunately, the means of mitigating that risk is fairly straightforward — do not record a lump sum lien. Instead, attach a breakdown of the lien amount as an exhibit to the lien. That way, if there is any question about whether an item is lienable or not, it should be fairly simple to segregate out any amounts in the lien which turn out to be non-lienable. The claimant could then record a partial release of the lien in the amount of the non-lienable items and the remainder of the lien would likely stand. This outcome is obviously a lot better than the lien being declared invalid altogether and the claimant having to pay the owner’s attorney fees.

Note: This article is intended to provide readers with general information and not legal advice. For specific situations, consult with competent counsel.

��The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither of the authors nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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Portland City Council tentatively overturned a Portland Design Commission denial of the Ankeny Apartments project by a 4-0 vote on Wednesday.

The seven-story, L-shaped complex at 1122 S.E. Ankeny St. will wrap around two single-family houses, and will include 16 apartments and ground-floor retail. The design has drawn criticism from neighbors but won praise from the City Council for efforts to make the project a net-zero energy building.

The latest change from earlier versions of the building was the adoption of setbacks ranging from 18 inches to three feet from the property lines on the south, north and east sides of the structure. The original design left the structure built up to the property line on all sides, which had concerned neighbors.

“I want to thank the applicant and the neighbors who spent a considerable amount of time going back and forth on this, and I think coming to a very solid and amical resolution,” Mayor Ted Wheeler said before casting his vote in favor of the project.

After the hearing, project developer Landon Crowell applauded the efforts of the city’s staff, especially Grace Jeffreys and Tim Heron of the city’s Bureau of Development Services. He also gave a nod to his development team, which included Jerry Waters of Yost Grube Hall Architecture, Tim Ramis of Jordan Ramis and Greg Vik of Vik Construction.

Other changes in the project from previous versions evaluated by the Design Commission included the addition of wood siding material on parts of the structure and a slight reduction in tower height.

“I have no standing to say this, but I think the revised building is an improvement over the original building,” Commissioner Nick Fish said.�� “I congratulate you for balancing the neighborhood’s concerns, ��but also having a building that is quite distinctive.”

The development team also volunteered to add a construction mitigation plan as a condition of receiving City Council approval. The plan will require an assessment of surrounding properties before and after construction to identify any damage that might occur during construction.

“This project has gone from being a zero lot line project to one that has setbacks,” said Ramis, who served as Crowell’s�� legal counsel. “That distinction has allowed us to address things like maintenance questions and construction issues.”

The development team ��also agreed to avoid any pile driving during construction. The issue had been a sticking point with neighbors who ��feared the process would damage their properties.

“We will use an auger system where we will drill a hole in the ground and inject concrete,” Ramis said. “If we tried to do (pile driving), it would be a violation of our construction plan and we couldn’t do it.”

The road to approval has been a long one for the project. First proposed in February 2016, it went through five Design Commission hearings and four City Council hearings before finally winning approval.

“I am really reluctant to reward a process that has had five hearings at the Design Commission and (four) hearing before us,” Commissioner Amanda Fritz said before casting her vote. “I appreciate the neighbors having been responded to at the end; it would have been better to have respond to them at the beginning.”

Wednesday’s vote was tentative. A staff report will be needed to finalize the updated design and construction plan before final approval is given. The final vote on the appeal will be held Aug. 31.

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One of the side effects of the Great Recession was that a lot of architects and designers ended up extending their careers longer than they intended originally. But with an improving economy and many firms now on solid economic footing, many owners and lead principals are finally ready to retire.

“We had a very large amount of folks that planned to (retire) in 2008 and 2012,” Jordan Ramis shareholder Brad Eriksen said. “The reason we are seeing more (transitions) is firms are on firmer economic footing.”

Managing an ownership transition can be a daunting and time-consuming task.

“I recommend looking at five years down the road,” Eriksen said. “It is a very long-term process. Even once everything is in place, you are looking at six to nine months, and there is a lot of leg work to get done.”

The first step, according to Eriksen, is to decide which succession route to pursue. Local firms have generally followed one of three options. The first is an outright sale of the firm to a new owner. Another is to elevate a current employee to owner or partner. And a third is to transfer to a group of partners.

Business owners should begin by determining whether any current employees can or want to take over, Eriksen said.

When Randy Jurgens decided to end his 37-year career at the helm of Jon R. Jurgens (now JRJ Architects) in 2012, Tom Wesel stepped up to become principal owner. Running his own business had always been an ambition for Wesel, and he had worked with Jurgens while pursuing a graduate degree at the University of Oregon. Wesel knew ownership would be an option when he came to the West Coast from NBBJ’s office in Columbus, Ohio.

“I enjoyed the exposure of the smaller firm,” he said. “Randy invited me back with opportunities for buyout, and I came back in 2004.”

Planning ahead was a key aspect that made the transition a relatively smooth one.

“A recipe for success is in the planning,” Eriksen said. “Start thinking about selling well in advance. It gives the architects time to do their due diligence. It just gives you a much greater chance of success.”

Another factor was Jurgens’ willingness to help make sure clients were comfortable with the new management.

“Our clients knew he was around, but it was clear to the staff they didn’t have two bosses,” Wesel said.

One aspect that took some adjustment, Wesel said, was administrative responsibility. Suddenly Wesel was not just dealing with major clients and projects; he was choosing health insurance and 401K plans.

“It wasn’t a shock, but it was a new experience,” he said. “I still really like to be hands on with the clients. Dividing those hands-on client management duties and the office management was different.”

The only change that clients noticed was a name change from Jon R. Jurgens to JRJ Architects.

“Our letterhead looks a little different,” he said. ”It wasn’t a big change in the industry. I was blessed to take over a firm that had strong reputation.”

While choosing a single leader from within can often be a relatively straightforward endeavor, creating a partnership can be more complicated, but secure a firm’s position over the long haul. Scott | Edwards Architecture added six partners when one of its founders, Kelly Edwards, decided to retire in 2013.

A key aspect of the transition was creating a system that would allow the firm to continue doing business far into the future.

“(Going to a partnership) really fit with the culture of our firm,” said Sid Scott, principal of Scott | Edwards Architecture. “There is about a 20-year age difference between the partners. We want the partnership to continue for many years.”

They established a system where partners put in equity to the firm for the percentage of ownership. While Scott has the highest equity stake in the firm, the remaining six all have the same percentage.

Scott said that the keys for partnership success ranged from educating the new partners about their responsibilities to designing a business structure that would work with seven participants.

“It is always an eye-opener,” he said. “You live through everything as it is going. You learn and make mistakes. It is a growing process.”

Making sure everyone is on the same page can be more difficult as a firm adds owners.

“Every time you add a player on either side of the agreement, you have to get them to speak with one voice,” Eriksen said.

Having a culture that prioritized individuality was important to making the new partnership work.

“For employees there was a good sense of ownership,” said Lisa McClellan, who was brought on as one of Scott | Edwards Architecture’s new partners. “As an employee you are always able to sort of run your own ship.”

McClellan said being able to have a hand in guiding the firm and to add another woman in ownership at an architectural firm were the biggest draws of partnership for her.

“It gives me the chance to go out and get the kind of jobs I want,” she said. “I have much more confidence to generate work.”

If handing the reins to someone inside a firm is not possible, then selling to an outside party becomes an option. WGS Planned Interiors & Design chose this route when owner Paul Gibbons decided to retire.

“I had 43 years in the business and had a whole series of other interests that I had been delaying,” he said. “It was time to push the rest button.”

Gibbons looked at his employees first, but no one stood out.

“They didn’t want to have the responsibility of being a business owner,” he said. “That wasn’t a viable option from my perspective.”

That’s where Andrea Bainbridge, principal owner of Bainbridge, entered the situation as a prospective buyer. Reaching an agreement in such a sale usually requires an outside party to evaluate the firm and determine a starting price for negotiations, according to Eriksen. However, Gibbons and Bainbridge bucked that trend and negotiated a deal themselves.

“What Paul prided himself in and what we pride ourselves in is having extremely long relationships with clients,” Bainbridge said.

Bainbridge bought Gibbons’ operation in its entirety. Then Gibbons stayed around for months to help Bainbridge develop a relationship with clients.

“It was primarily about making sure my client base that I had developed over 40 years was taken care of,” Gibbons said. “She is a business lady that had a very similar philosophy. We spent a fair amount of time to see if I could make the transition to her firm.”

Valuing intangible assets is always one of the toughest parts of the sale process. A firm’s hard assets like computers, tables and offices are often fully depreciated and replaced. Intangible assets like a client base and future profits draw buyers.

After hammering out a handshake deal, Bainbridge got three of Gibbons eight clients to become permanent patrons of her service. Gibbons got to move to Aurora, where he pursues his passion for making ornate knives.

“We got three excellent clients, so it was good profit for us,” Bainbridge said.

Regardless of which transition method is chosen, a big part of making it successful is maintaining strong relationships.

“I would make sure that if you have sustaining clients, those relationships are solid,” Wesel said. “If you don’t have a history with a repeat client, you can have 50 percent of your work gone. Your relationship has to be solid.”

Getting good advice well in advance of a possible transition is also vitally important.

“Talk to your advisors,” Eriksen said. “Whether it’s insurance, accountants or lawyers, getting that advice makes it go a lot smoother.”

The post Preparing to pass the baton effectively appeared first on Daily Journal of Commerce.

Ask Tim Ramis to point out the person who played a key role in helping him become one of the region’s top lawyers in land use and municipal law, and there’s a good chance he’ll mention Harold Schnitzer.

“He really gave me an opportunity in my career to try my first land-use case in City Hall,” Ramis said.

The Jordan Ramis shareholder has come a long way from that first case. Last year, he successfully represented the city of Scappoose in an appeals case with a decision that is expected to give Oregon cities more solid footing when it comes to bringing land inside urban growth boundaries when those moves are opposed by residents and environmental groups.

His fascination with how cities grow – or, in Oregon’s case, sometimes don’t grow – can be traced back to when he was in high school, a time when social and political unrest sparked protests across the country.

“Cities were burning down; Watts was on fire,” Ramis said. “It made me curious about cities and how they worked.”

Ramis knew he wanted a career that would somehow help him satisfy that curiosity. He found a more specific direction in law school. There he met Dave Frohnmayer, who taught a class in legislative and administrative policies. Frohnmayer helped Ramis see how the law helped shaped government decision on how cities took shape.

“I knew I wanted to work in the building and governing of cities,” Ramis said. “Land use law became a way into that world.”

While Ramis says he doesn’t plan on stepping away from the legal world anytime soon, he did step into new territory a couple of years ago when he created a website called Tim’s City. The site is designed to share his love of cities and urban issues with others through videos and photography.

He also continues to work with Specialized Housing Inc., a local nonprofit group that Ramis and a friend formed approximately 30 years ago with the goal of building housing for people with disabilities. It’s a demographic that he’s concerned is being overlooked amid the debates over creating more affordable housing in Portland and elsewhere in Oregon.

“I’m hopeful that whatever decisions get made to address housing we don’t forget this population of people,” Ramis said.

The post Newsmaker 2016: Tim Ramis appeared first on Daily Journal of Commerce.

The pile of presents in the offices of Jordan Ramis earlier this month might have made it easy to mistake the Portland-area law firm for Santa’s workshop at the North Pole.

But the stacks of toys were just the results of an annual giving campaign that the firm tackles each holiday season in order to make Christmas wishes come true for local foster kids.

“They send us a … pretty long list of all of the presents these kids have requested,” Jordan Ramis Chief Operating Officer Beverly Root said. “The last few years, we’ve been able to fulfill every one.”

While collecting toys for foster kids is a regular December effort at Jordan Ramis, the firm also chooses a second charity each year to support. Although the second organization usually changes, some elements remain constant.

“It’s always something local, and it’s always something that resonates with the staff,” Root said.

There’s also a good chance the way Jordan Ramis will go about supporting that second group will be unique.

During the recession, for example, the firm held an in-house Christmas party that featured an auction with items donated by the Jordan Ramis lawyers and administrative staff: a handmade quilt, a brunch at a staffer’s house, the donation of a weekend at a cabin in the mountains. One Jordan Ramis employee offered to teach scuba diving lessons to a highest bidder. The money raised from the auction that year was donated to a group that at the time ran a substance abuse hotline.

That auction also gave rise to another unique way that Jordan Ramis raises money each year. During the auction, the firm’s leaders came up with the idea of raffling off a pass that would allow the purchaser to wear blue jeans on any day that he or she didn’t have to meet with a client. The passes are now offered every year, with the purchase price set on a sliding fee based on employee salaries.

Trying to pick a nonprofit group to support can be overwhelming, so Root recommends narrowing the pool by asking people within one’s company or firm to provide input.

“If people are passionate about something, they know something about the agency,” Root said. “It’s a good vetting process.”

Drumming up employee support once a charity is chosen doesn’t just benefit the selected organization, Root points out. Fundraising events and efforts can serve as great team-building exercises. One easy way to get employees excited about supporting a charity, Root suggests, is to have someone from the agency come in to talk directly to employees about the group and its mission.

“It becomes so real; people get personally affected by the story,” Root said. “(They’ll be) so much more interested in getting involved.”

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The city of Scappoose, which lies approximately 30 miles northwest of Portland, has struggled in recent years to find ways to fill the economic gaps left after the timber industry dried up and the numerous mills around the area closed.

But that may soon change in light of a recent decision by the Oregon Court of Appeals that will allow the city to annex a 380-acre parcel of industrial land into its urban growth boundary (UGB).

The decision isn’t expected to alter only the future of Scappoose. Land use experts say the court’s ruling, which upheld a prior decision by the Oregon Land Conservation and Development Commission (LCDC), is expected to change the fortunes of other cities in Oregon that have run into opposition from residents and environmental groups when they have tried to bring land inside their urban growth boundaries.

Jordan Ramis shareholder Tim Ramis, who argued the appeals court case for the city of Scappoose and has worked on the legal side of land use issues for decades, agrees the decision may indeed be a game-changer.

“I think the court will be more willing to approve UGB amendments and refrain from overturning (in cases) where LCDC and local government have created a good record for compliance with the law,” Ramis said. “I think it’s a good sign.”

The parcel in Scappoose, according to Scappoose City Manager Michael Sykes, is one of the last few large chunks of industrial land left in the Portland-metro area. Since 2011, the city had been trying to bring it into its urban growth boundary in order to allow the owners, Joe Weston and Ed Freeman, to move forward with development. Because the property is located near the Scappoose Industrial Airpark, the city believed that airport-related businesses that could be established there would help spur job growth.

“(Columbia County has had) some setbacks because of our dependence on natural resources,” Sykes said. “Plenty of (timber) mills have closed in the past 15, 20 years. There’s always been a vision that (area) could be a hub to industrial development.”

Not everyone in Scappoose agreed, however. A group of citizens opposed to bringing the land into the UGB asked the LCDC to review the case. The commission ultimately determined the city had provided enough evidence to show that bringing the property into the city’s UGB would create enough jobs and attract enough people in the future to justify the move.

Patricia Zimmerman, who lived in the city at the time and was opposed to the plan, remained unconvinced. She decided to appeal the LCDC decision to the Oregon Court of Appeals.

Because the Scappoose case was subject to a legal test called substantial evidence, the LCDC had based its decision on whether it felt the city of Scappoose had provided ample evidence to justify allowing the city to bring the land into its urban growth boundary. The usual approach attorneys have used in the past to argue such cases when they advance to the appeals level has been to argue the evidence of the case.

“In the case of industrial land, you’re trying to show the amount of land you’re proposing is supported by evidence you need this land,” Ramis said.

Ramis, representing the city in the appeal, knew that other cities in Oregon had ended up on the losing end when their similar battles had landed in the state’s appeals court. So he and his team decided to take a different approach.

“We chose not to argue the evidence of the case,” he said. “Instead, we argued the court’s scope of review should be limited.”

In other words, Ramis and his team argued that the appeals court’s responsibility wasn’t to determine whether there had been substantial evidence in the record to support the original decision. Instead, the court’s role was simply to determine whether the LCDC understood the law when it ruled that Scappoose had provided adequate evidence to show that future population growth, spurred by development on the land, would support and justify including the 380 acres in the city’s urban growth boundary.

“The court agreed … it should defer to the expertise of the LCDC,” Ramis said. “Sometimes simple is best.”

The appeals court’s decision could be overturned if the state Supreme Court agrees to consider the case. However, Zimmerman’s attorney, Michael Sheehan of Sheehan & Sheehan LLC, said his client has decided not to pursue the issue further.

“It’s done,” Sheehan said.

Before development can begin on the property, it will need to be annexed into the city’s UGB, Sykes said. He doesn’t expect to run into hurdles in that area, however. Although at one time, annexing land into the city required voter approval, city residents about a decade ago voted (54 percent in favor) to eliminate that requirement.

The city hasn’t heard of any specific plans for the 380 acres yet from the property owners, according to Sykes. At one point, he said, there was talk that Portland Community College was considering land around the airport as a location for a Columbia County campus.

Whatever eventually rises on the land, Sykes believes it will help the city increase the number of jobs within its boundaries – helping those already living in the city while also attracting new residents.

“Approximately 90 percent (of those living in Scappoose) commute to jobs in either Beaverton or Portland,” he said. “We’re hoping this becomes a catalyst for growth.”

The post A potential game changer for Oregon cities appeared first on Daily Journal of Commerce.

In six weeks, a major change will hit Oregon labor law, and the construction industry and other interests that fought a paid sick leave proposal in the Legislature are worried about enforcement once it becomes the law of the land.

Associated General Contractors and Associated Builders & Contractors still oppose Senate Bill 454, which was signed into law in June and will require most employers to provide 40 hours of sick leave to employees annually. That’s because much of the law has yet to be determined.

“This is one of the bigger (laws) we’ve had to deal with at one time – it’s a sea change,” said employment and labor lawyer Amy Robinson of Portland firm Jordan Ramis.

Oregon is now the fourth U.S. state with a mandatory sick leave policy, following a fierce, party-line fight and opposition from chambers of commerce and business groups, including the agricultural, food processing and timber industries. It was part of a swell of similar labor reforms in Oregon; Portland’s mandatory sick leave policy was passed in 2013. In September, President Obama ordered all companies doing business with the U.S. government to have sick leave policies.

Oregon’s new law applies to all employers, and to nearly Oregon’s entire workforce – full-time, part-time, seasonal and temporary employees. It’s intended to cover many types of employee leave, from mental health to a care for a sick family member. The law goes into effect Jan. 1, 2016, but the government agency tasked with enforcing it – the Bureau of Labor and Industries – is still in the rulemaking phase. Of particular to concern to construction groups in the weeks ahead will be ensuring that contractors’ existing sick leave policies, and collective bargaining agreements that provide sick leave, are covered under the law.

If not, the AGC is ready to propose legislation next session to exempt contractors that give employees benefits equivalent to what the law requires, according to AGC’s public affairs specialist, John Rakowitz.

Rakowitz said the construction industry is not opposed to sick leave and that most of its employers already provide the benefit. But construction is a “mobile” industry, he noted, with employees frequently moving among job sites and even employers. As such, it shouldn’t be covered by such a broad rule, he said.

“What they’re trying to do here is pretty difficult,” he said. “They’re trying to write one completely new – from whole cloth – employment benefit for every industry, and every size and type of employer, in the state of Oregon.”

BOLI has announced that a six-month “easing-in” period will allow for compliance. It has submitted draft rules for public testimony. Its Rules Making Advisory Committee will meet several times this month, including this morning, to hammer out details.

A lot is at stake, according to labor and employment lawyer Fallon Niedrist of Fisher & Phillips‘ Portland office.

“(BOLI) has pretty broad discretion to fill in the gaps,” she said. “And the law itself is pretty broad and doesn’t give a lot of details. (The draft sick time rules) aren’t very inclusive right now. I’m guessing over the next few years, BOLI’s going to add more regulations.”

Niedrist said the vast majority of the clients she counsels already provide 40 hours of sick time annually, but not all of their employees accrue it as fast as the law requires (one hour for every 30 worked). Some make staff members work a full year before the benefit kicks in. But under the draft rules, employees start earning their time off the day they start work and must be able to take it within 90 days.

Robinson said there is concern among clients that those already tracking benefits through the federal Family and Medical Leave Act and the Oregon Family Leave Act will have to perform additional record-keeping. The more administrative hurdles a business must jump through, the more a bottom line is impacted, she said.

Another issue is whether a general contractor or a subcontractor will be on the hook. Provisions tied to “staffing” entities and “hiring” entities are commonly understood to refer to businesses like staffing agencies. But they could also refer to GCs and subs, Robinson said.

“The way the proposed rules are articulated, it looks like both the hiring company and the staffing company are to be in compliance with the law, and there’s some question about what that will mean,” she said.

Along with the possibility of contractors being forced to spend thousands of dollars on attorneys and record-keeping, the AGC has said perhaps the most “perverse” effect of the law will upset the competitive balance between open-shop firms and unions.

“Given the specifications of which collective bargaining agreements will be considered exempt, there will be some of our members who have CBAs that do not meet these requirements,” wrote Mike Salsgiver, executive director of AGC’s Oregon-Columbia chapter, to BOLI Chairman Brad Avakian. “As such, this creates a divide between our union members.”

Avakian has said that BOLI is committed to applying the law in a way that is fair to both employers and employees. Trainings are expected to be offered later this month or in early December to help Oregon businesses navigate and comply with the new law.

“We want the measure to be as successful as possible and will direct resources to help organizations get up to speed on what the law means for them and their workforce,” he said.

The first meeting of BOLI’s Rules Making Advisory Committee is scheduled for Friday, Nov. 20. Other issues it plans to address include medical verification, purposes of leave and the posting of notices. SB 454 included funding for BOLI to hire additional staff to inform the public, respond to inquiries and manage the added workload created by the law.

Ken Maddox, business manager at Hamilton Construction, said the company is well-positioned for sick leave changes, because it had practice with Portland’s law. He said he supports all efforts to streamline and simplify the process. But for a company with 200 employees that does business across the state, it’s good to have a consistent policy, he said.

“We’ll conform with the statute, whatever it says.”

The post New sick leave law has some folks feeling ill appeared first on Daily Journal of Commerce.

Attorney Roger Lenneberg believes the construction industry is suffering from a malady that could easily be cured.

The problem, the Jordan Ramis shareholder says, is that the industry isn’t currently graced with a culture or the skills set to stop and handle disputes and disagreements when they arise. As a result, conflicts on a project may fester or continue to grow until they become unwieldy or threaten to stop work cold.

“Small problems turn big, and big problems are delayed, which ultimately hurts everybody,” Lenneberg said.

He isn’t just advocating for companies in the building industry to turn to mediation and other alternatives to solve disputes that arise on projects. He’s on a mission to take the idea of dispute resolution one step further.

More and more companies in the building industry are including mediation and arbitration clauses for handling large disputes being included in project contracts. But Lenneberg thinks those clauses might not need to be called into action if companies would include in contracts a requirement that conflicts be address as soon as they arise.

“Provisions that require arbitration and mediation for claims and disputes, you see that in contracts,” he said. “But none force it to the forefront. None make it a continuous resolution process.

“I believe the answer is to take a progressive approach to dispute resolution, building in a mechanism where those disputes have to get resolved as you go along.”

Lenneberg already has created one such mechanism. He started a website called Best Offer Arbitration, where parties involved in a dispute could each submit what they considered a fair resolution. An arbitrator provided through the site would then pick one of the resolutions. The entire process took a maximum of 45 days and cost each party involved $750.

Even if a project had several disputes that needed to be resolved, the cost of using Best Offer’s services would be far less than becoming tangled in an overblown lawsuit down the road, Lenneberg said. There was just one problem with the site.

“We couldn’t get anyone to use it,” Lenneberg said.

He’s not giving up on the idea that site like Best Offer might someday become a tool that the construction industry taps into, though. He sees the industry’s current approach to conflicts on projects as being similar to the industry’s view of safety more than two decades ago.

“Twenty five years ago, safety was not an issue that companies dealt with; it was a plague that did not get addressed,” Lenneberg said. “Then there was a shift. People realized safety impacts everything, and now that’s an accepted part of the culture.

“Conflict and bad dispute resolution practices are the plague of the industry now.”

Lenneberg first began doing mediation back in the 1990s as part of a pilot program that was being tested in Multnomah County’s small claims court. He not only found the approach to be interesting, he saw a real value in mediation as a way to avoid the complications and costs of lawsuits and courtrooms.

In addition to earning a law degree from Lewis and Clark Law School, he studied at Pepperdine University’s Strause Institute for Dispute Resolution. He spent time as an in-house counsel for a specialty contractor before joining Jordan Ramis, and also spent five years as a mediator and arbitrator.

“Over the course of the years, after watching people spend a lot of money with very little to show,” Lenneberg said, “I became more and more convinced there was a better way and it involved the notion that if we can’t agree, then we have a third party tell us what to do.”

He’s come to learn that when it comes to finding solutions for disputes, one size doesn’t fit all. Instead, he strives to develop a unique approach for each situation.

“One of the benefits we hear about alternative dispute resolution (is that) you can build it any way you want,” Lenneberg said. “It opens up a whole world and a whole conversation.”

The hardest part of that conversation for the construction industry, though, is getting it started.

“The future of alternative dispute resolution (in construction) is in the same mode as safety was,” Lenneberg said. “We had to educate (about safety), create awareness and provide new tools. That’s exactly what we’re faced with now with alternative dispute resolution.”

The post Roger Lenneberg: Finding a cure for construction’s new plague appeared first on Daily Journal of Commerce.

Federal and state government agencies have been increasing enforcement efforts to address misclassification of workers as contractors rather than employees. The U.S. Department of Labor has added 250 investigators to aid with compliance efforts, and the IRS also has been transparent in its intent to step up audits and enforcement efforts to combat misclassification. Meanwhile, the state of Oregon created an Interagency Compliance Network to proactively educate businesses and coordinate enforcement activities between key state agencies.

Courts, too, are being asked to opine on worker classification more than ever, and some decisions totally contradict what had been traditional business models in certain industries. This includes a 2014 decision by the U.S. Court of Appeals for the Ninth Circuit, which held that under Oregon law, a class of 363 full-time FedEx delivery truck drivers were employees and thus entitled to additional wages and overtime.

So, why is misclassification such a big deal?

Well, for taxing authorities, classifying a worker as a contractor rather than an employee results in lost tax revenue. For others, it means the worker will not receive the benefit of employment-related legal protections and benefits that the worker may otherwise be entitled to.

For businesses that incorrectly classify employees as independent contractors, scenarios can be “make or break.” That’s because getting it wrong can mean the business may be on the hook for a host of additional unplanned costs, including:

• Payment of back wages and benefits that were neither anticipated nor budgeted for;

• Employment-related taxes on all wages owed to the misclassified worker(s);

• Fines, interest, and/or other penalties, including attorney fees, if the mistake is uncovered by the regulatory agency, or in connection with a civil claim brought by the worker;

• Additional workers’ compensation insurance premiums and potential claims for workplace injuries; and

• Liability for employment-related claims by the misclassified worker, including anti-discrimination, anti-retaliation, wage and hour, workplace safety and health, and protected leave laws.

These amounts can be staggering for even a single misclassified worker. Where there are multiple workers, the figures grow exponentially. This can also occur where an otherwise properly classified contractor employed its own workers to perform services, but didn’t follow the requisite formalities.

Isn’t this as simple as looking at whether the business issued a 1099 or a W-2 at the end of the year?

Unfortunately, no. Instead, a patchwork of fact-specific tests need to be considered. There are no fewer than three multi-factored tests that could apply under federal law. In Oregon, four tests may apply. Just as Oregon has its own tests, so do other states. If a worker performs work in other jurisdictions, the business must also consider the tests applicable in those states.

What generally isn’t relevant to any of the tests is what the business or the worker intended or often even what the paperwork says. Instead, the best practice is to consider the applicable tests before commencing the work so that the relationship can be properly structured to comply with the applicable legal standards.

Given the inherent risks of misclassification, the complexities and fact-specific nature of the proper determination of each of those issues, and the increased enforcement efforts at every level, it’s easy to see how a mistaken misclassification has the potential for a huge negative impact on a business. For these and other reasons, I typically recommend that the proposed relationship be evaluated, with advice of qualified counsel, and structured so that all of the potentially applicable tests are met, and then memorialized in an appropriate written agreement, before any work commences. By properly and proactively applying the appropriate standards in advance, businesses can best avoid the foreseeable risks.

Hopefully, this brief summary has been useful. Of course, it is merely intended to highlight the issues and legal standards, and point out some common risks and pitfalls related to misclassification. This synopsis should not replace independent legal advice for any particular situation.

Amy Robinson is an attorney in Jordan Ramis PC’s labor and employment law practice group. She has experience with a full range of employment issues. Contact her at 888-598-7070 or amy.robinson@jordanramis.com. This article is intended to inform readers of general legal principles; they should consult with competent counsel when addressing specific situations.

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