Hiring is probably the farthest thing from most builders’ minds right now, as business conditions remain unstable. But at some point, builders will need to replenish their jobsite and administrative ranks, and when they do they better pay attention to any past contractual agreements that might enjoin or at least limit job applicants from working for certain companies.
Michael McAuliffe Miller, a member of the Harrisburg, Pa.-based law firm Eckert Seamans Cherin & Mellott, who specializes in labor law, tells BUILDER that employers should be alert to whether a worker being considered is covered by a collective bargaining agreement, a noncompete covenant, or a severance agreement that prohibits re-entering the workforce over a certain period.
That first concern isn’t a problem if a builder is “at will,” says Miller, meaning that it is not hiring unionized workers. And as labor on residential jobsites in most states is nonunion, this is not a big problem for builders. However, if the labor being considered is covered by a union contract—as is the case for certain trades in a number of states—“there is a host of issues to deal with,” he explains, such as whether or not: that person will retain his or her seniority when hired; that person will be required to do a different job, which the union might have something to say about; and whether or not someone can actually get hired under an existing contractual arrangement.
“These are solvable problems that can be negotiated with unions,” says Miller. But the employer needs to look at each contract clearly. “You have to have a plan for hiring.”
Of greater concern for builders would be hiring—or even rehiring—applicants who are bound by noncompete or severance agreements with current or previous employers. Miller notes that the more senior-level a worker is, “the more likely it is that an employer wants to lock them up” in a contract that prohibits them from working for a competitor.
At the very least, builders need to get a hold of the applicant’s contract to see whether or not hiring that person would cause any legal headaches.
During the recession, the housing industry underwent massive layoffs. And Miller acknowledges that in residential construction “the work isn’t guaranteed.” But there have been instances where builders have rehired laid-off workers. And as business conditions have picked up in certain markets, some builders and their suppliers are hiring again. Miller cautions that employers need to be careful about appearances and legal liability, especially if the employees let go over the past few years were older than the ones being hired now. “It’s not difficult for a plaintiff’s attorney to put the pieces together and make an argument” for age discrimination, he says.
Miller admits he’d be nervous trying to defend a builder that had previously slashed its workforce and is now hiring in a way that appears to favor younger and less-expensive applicants.
John Caulfield is a senior editor for BUILDER magazine.