Zinzow Law

FTC Non-Compete Ban: What It Is, What It Isn’t, and Strategies to Blunt its Impact

FTC Non-Compete Ban: What It Is, What It Isn't, and Strategies to Blunt its Impact

I. Introduction


On May 7, 2024, the U.S. Federal Trade Commission (“FTC”) published its final rule declaring all existing non-compete agreements unfair competition and making them unenforceable, with very limited express exceptions. The rule becomes effective on September 4, 2024. The team at Zinzow Law joins the chorus of voices decrying this as yet another substantial overreach by what should be the limited government our Founding Fathers designed for us. If you believe in Liberty and in exercising freedom in the pursuit of your American Dream, then this article is a must read. While the FTC’s rule is being challenged in litigation throughout this country, this article summarizes immediate action you can take to achieve your objectives in defiance of the government’s latest edict.

II. What the Rule Does & What it is Really After



The rule and its purported justification, full of statistics and summarized testimony of the “experts,” runs a full 570 pages. Woven into the fabric of all those pages is what the FTC is really after: forced wage increases and guaranteed employment contracts which prohibit termination at will, and which make it difficult and expensive to terminate even for cause. Responding to those who opposed the rule’s adoption, the FTC exclaimed that employers have better tools at their disposal than non-competes; employers can simply: (1) provide a better work environment, (2) pay higher compensation to prevent employees from leaving, and (3) provide guaranteed contracts with guaranteed employment duration. The FTC calculates that as a result of this new rule, the FTC will force employers to do one or all of these three things, thereby increasing employee wages nationally by $58,291,058,349. (Rule, App. Table A.1). For those not minding all those commas, that is over $58 billion!

With the FTC’s true purpose in mind, the rule makes sense. It prohibits employers from entering into, or attempting to enter into, non-compete clauses with workers who are not senior executives, whether classified as employees or independent contractors, and whether the worker was employed through a PEO or directly by the employer. It also declares existing non-compete clauses with these workers illegal and unenforceable unless the worker has violated the clause before the rule’s effective date. It also requires employers to send written notice to both current and former employees notifying them of the rule, and stating that the clause is now unlawful, and that the employer will not enforce it. This notice must be sent by the effective date. You can thank the FTC for making it easy for you to do this, because the FTC has created model language (though you are not required to use it) which also tells the worker that “you may seek or accept a job with any company or any person-even if they compete with employer” and “you may complete with employer following your employment with employer.” The FTC has also done us all the favor of translating this model language into Spanish, Chinese, Arabic, Vietnamese, Tagalog, and Korean.

So-called senior executives are given different treatment under the rule, but do not breathe a sigh of relief just yet. The definition of senior executive is, well, not representative of what most employers consider a senior executive to be. Additionally, even when dealing with a senior executive, the rule differs from how other workers are treated in only two ways: (1) existing non-competes remain enforceable into the future, though employers are still prohibited from entering into new non-compete clauses with senior executives after the effective date; and (2) employers are not required to send the love letter welcoming competition. For a worker to qualify as a senior executive, the worker must: (1) be the employer’s president, CEO, or equivalent, (2) have policy making authority without having to consult anyone else, and (3) receive total annual compensation of at least $151,164 excluding fringe benefits. If the employer is one of a conglomerate of companies as is the case with many in this industry, the worker must have decision-making authority over the entire conglomerate, or they are not considered a senior executive.

III. How You Can Navigate Around the Rule’s Overreach


For those keen and decisive enough to implement certain strategies, the rule’s apparent impact can often be avoided or substantially minimized. While at first blush an employer’s preference for a non-compete is to prevent a worker from competing, this is typically not the problem employers are actually trying to prevent. As deeply patriotic Americans, those of us who build America believe in the free market. We believe that competition makes us better and betters the world around us. What we are truly trying to prevent, is investing time and coin into building a brand, building client relationships, and building a skilled worker with proprietary information, only to have that worker harm the brand, steal the clients, and use the proprietary information elsewhere. These concerns are legitimate, and employers can still prevent workers from engaging in these improprieties if employers deploy the right strategies.

While this primer cannot cover all of these strategies, or even cover select strategies in depth each merit, we will highlight some to begin the dialogue we urge you to have with the right legal professional. First, the rule does not prohibit employers, now or in the future, from making workers sign a non-compete clause which prohibits competition while the worker is employed by the employer. (Rule, p. 66-67). In other words, you can prohibit concurrent employment. This type of narrowly drawn clause allows you to target the most common fact pattern: a worker who has started creating a competing business while employed by you, or a worker who has started sharing information with a competitor during a courtship period while that worker is still employed by you. Second, employers can draft highly specific confidentiality or non-disclosure clauses which prevent the worker from sharing proprietary information, but these clauses cannot be so overbroad that they are the effective equivalent of a non-compete. (Rule, p. 68). These clauses must be carefully designed and written to survive scrutiny. Third, employers may be able to craft a special clause which imposes a cooling off period which does not prohibit, penalize, or function to prevent a worker from switching jobs or starting a new business altogether. (Rule, p. 49). Fourth, employers may impose a training-repayment agreement, also known as a TRAP, which requires the worker to reimburse the employer for training costs if the worker leaves the company before a certain date. The sum must bear a reasonable relationship to the costs the employer incurred (Rule, p. 68). Many employers can compute and document a substantial cost of training; substantial enough that a worker would likely be dissuaded from leaving. Fifth, employers may implement strategic and precisely targeted clauses which prohibit workers from soliciting employers’ other workers, and perhaps even employer’s clients as long as the provisions are not overbroad. (Rule, p. 77). Sixth, employers can impose a clause which requires a worker to repay bonuses received if the worker leaves employment before a certain date. (Rule, p. 82).

Each of these, and other strategies, require immediate action to implement. Garden variety employment contracts, handbook provisions, and non-compete agreements were likely not drafted with these strategies in mind. New agreements of some kind may need to be drawn in some instances. Additionally, if employers choose to send an unenforceability notice out of fear of non-compliance, such notices should be very carefully worded to preserve the above and other strategies rather than entirely waive protections which do not fall under the rule’s definition of a non-compete.

IV. Why Must You Take Urgent Action


Employers should seriously evaluate the risk of a wait and see approach. While several industry groups are challenging the new rule, it could take many months to several years before the issue is ultimately settled for Florida employers. Additionally, anticipating these legal challenges would be forthcoming and that portions of the new rule could be attacked, the federal government included a severability provision in the rule, meaning that even if courts find certain portions of the rule invalid, other portions of the rule will be allowed to survive because the rule was not drafted as an all or nothing edict.

Additionally, employers who do not deploy proactive solutions could be hit with lawsuits, possibly even class action lawsuits, for failure to comply. While there is presently no right, under federal law, of a worker to sue his or her employer for violation of the rule, such a right likely exists under Florida’s Deceptive and Unfair Trade Practice Act which provides a lawsuit remedy for workers who are the subject of unfair competition. The Florida Act defers heavily to interpretations of the FTC, which has now declared these restrictions to be unfair competition. Law firms often take consumer protection cases on a contingency fee basis because of the right to recover attorney’s fees, so workers may not need any money to hire lawyers to sue their employers. Importantly, if employers are sued by one or more workers, the employer may not have insurance coverage available to pay for the defense and any damages which may result (certain employer practices liability policies may provide some coverage, but these policies were never written with this issue in mind).

Lastly, even if the rule in its entirety is declared unlawful and an employer has not been sued by workers in the interim, the FTC still has the constitutional authority to take legal action against employers under existing lawful provisions of the FTC Act. The FTC Act has been in existence for many years. Before the new rule became effective, the FTC was consistently using the Act itself to pursue employers for using what the FTC believed were overly restrictive non-compete agreements.

For these and other reasons, employers should take proactive measures now to avoid federal enforcement and worker litigation. The good news is that creative strategies are available to circumvent the rule and minimize its immediate and ongoing impact on employers who must protect their legitimate business interests.
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2024 New Laws To Live By

New laws to live by - Florida

In his inaugural address, Thomas Jefferson said that “[a] wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”

I am pleased to report that from the beginning of my work last year in the trenches on government affairs committees and with lobbyists for this legislative season, through my time in Tallahassee and post session wrap up, Florida state government has stayed true to Jefferson’s enlightened words. Our state government has largely stayed out of private industry’s way and prevented local government, perhaps not so enlightened, from taking our bread. Having spent the last twelve months working in preparation for this year’s two-month session now concluded, I can honestly say that it never gets old. As a Patriot I find joy in being a voice to our representative government – a government that listens. As an Advocate I feel privileged to represent the will of the very people who build America. I hope this legislative briefing will enlighten you as I remain humbly at your service.
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What American Patriots Need to Know about Christ’s Crucifixion

While Easter, Easter Eggs, and the Easter bunny grab headlines in secular circles, Christ’s Crucifixion on Good Friday merits more than a little attention.  What does it mean for us?  Romans 6:23 teaches us that the penalty for sin is death, but God, through his Son Jesus Christ, gave us an immeasurable gift.  So that we might have forgiveness and avoid His Father’s most extreme penalty for our sins, Christ, a pure and perfect being, sacrificed Himself.  He suffered immensely for us.  He took our punishment so that we can receive God’s forgiveness, even though we do not deserve it.  He provided selfless service to us.

 

How can we recognize the gravity of this immeasurable gift?  By providing selfless service to others, even when it is inconvenient, or even immensely difficult.  We awake every day to reports of political turmoil.  Hate.  Reminders of how and why we must despise and fight our fellow countrymen and women and everything the “opposing camp” stands for.

 

But it needn’t be so.  Remember that Americans are more alike than different.  We are all imperfect, but we are also all children of God.  As our Declaration of Independence reminds us, we were all endowed by our Creator, with certain unalienable rights:  life, liberty, and the pursuit of happiness.   God gave us all, no matter our political affiliation, the great gift of life.  Our Country, and indeed the world, will be a better place if we forgive perceived trespasses against us by those we disagree with; if we take a moment to perform an act of kindness for someone we don’t understand or someone we are told to dislike; if we emulate Jesus by serving another, whether we perceive they deserve it or not. 

 

May God Bless All Americans, and may you take respite this Good Friday in the solemn gift of Christ’s crucifixion, and celebrate this Easter Sunday in the miracle of His Resurrection. 

 

 

Justin R. Zinzow

CEO

on Behalf of Team Z

Your Resource for Changing Laws: Construction & Development

Your Resource for Changing Laws: Construction & Development

Our state capitol in Tallahassee may seem like a world away, but as they say, all politics is local. Change in Tallahassee brings change to your doorstep. Just finishing its second week of legislative session, things are moving swiftly and more flexibly as Governor DeSantis campaigns to be our country’s next President. While there are still almost two months of session left to go, Zinzow Law’s work for you began months ago, influencing priorities to support, priorities to oppose, and bill drafting. As I close out this week’s advocacy from the halls of Tallahassee, I write to provide you with this progress update, which will be one of many to follow during session, ultimately culminating in our official guide: New Laws to Live By. New Laws to Live By will explain, as it has in prior years, laws and regulations passed and how they impact you. Do not hesitate to contact us if we can be a resource for you locally, in Tallahassee, or beyond.
Immigration: Despite the challenges caused by last year’s sweeping immigration bill, which became effective January 1, few elected representatives, including the Governor, seem willing to talk about fixing unintended and problematic consequences. This is little surprise, given the ongoing Presidential campaigns. Even still, the immigration law is not the death knell it seems, and a studied understanding leaves businesses free to grow their organizations without fear of substantial repercussion.

Construction Defect: Last year our industry landed two big wins in the fight against frivolous construction defect claims. We are guarding against anything that will water down those wins—and such efforts are afoot–so that we can be well poised to build upon them in future sessions.

Sadowski Funding: For many years money from the Sadowski housing trust fund was wrongly used to fund a multitude of other state programs. Full funding of the fund creates billions in economic benefit and creates nearly 30,000 jobs while providing safe and affordable housing. We are advocating for full funding and for legislation prohibiting the misapplication of those funds to non-housing uses. Mobility Fees and Impact Fees (Dual Payments and Transfer of Credits): The industry has always understood mobility fees as a replacement for, and successor to, impact fees. Yet the government, all too happy to pull deeper from your pockets, has been treating these fees as two different and available hammers, and have been double dipping by charging both. Additionally, in areas where builder/developers have acquired impact fee credits, municipalities will not apply these credits against mobility fees, all of which increases the cost of your development and housing. We are advocating for the passage of legislation that will put an end to this form of fee gouging.

Workforce: Worker’s compensation insurance and other forces at play have made it difficult for companies to recruit working teens, ages 16 and 17, into an exciting and rewarding career in construction and development. We are advocating for changes which will allow young adults, after sufficient OSHA safety training, to work on project sites, and for enhancing available construction trade education offerings to students.

Heat Exposure: Counties across the state have been trying to impose their-own jobsite heat exposure regulations upon construction and development companies. Workers are already well protected and trained on heat exposure under OSHA regulations and programs. We do not need 67 different counties adopting a multitude of conflicting additional and unnecessary burdens, so we are advocating for the passage of a law which prohibits counties and cities from taking this action.

Residential Building Permits: Review continues to take too long notwithstanding ever-increasing taxes and fees charged by government, and builder developers often receive comments from reviewers on a piecemeal basis which complicates, delays, and increases expenses in the permitting process. We have been advocating for a bill which imposes review deadlines and prohibits piecemeal comments, as well as which requires reviewers to cite specific code provisions supporting their comments and rejections, so you are not left guessing and have the ability to defeat requirements invented out of thin air.

Construction Fraud: Because of a few bad actors who stole deposits from unsuspecting homeowners in hurricane impacted areas, some are pushing for a massive change to the way residential builders handle finance. Presently making its way through the legislature is a bill which attempts to impose escrow account and accounting requirements on builders, making failure to do so a felony, even if the construction project is successfully completed. We have been working closely with industry partners on defeating this bill, or substantially narrowing its scope. There are already sufficient laws and regulations on the books which prohibit this form of theft.

Warranty Transferability: Contractors and warranty companies have honored the transferability of a one year or 2-10 warranty, but some builders have recently started denying warranty claims by successive owners, even if the warranty is unexpired. As a result, legislation is now pending which will require that builders and warranty companies honor transferred warranties. Early versions of this legislation make it a deceptive and unfair trade practice to deny a transferred warranty, which will open the floodgates of litigation. This week we met with both the House and Senate sponsor to discuss our concerns about certain aspects of the bills and secured an agreement to remove any offending language.

Continuing Contract: Continuing contracts with cities and counties work much like private sector Master Service Agreements in the way that they allow construction companies and design professionals to bid for the opportunity to receive an ongoing contract for multiple projects, rather than for just a single project. We are supporting legislation which expands these opportunities from their current $4 million in value to $10 million, and which opens the door to other project types.

Private Provider: In those areas where permit review and building inspection are slow or otherwise problematic, private providers can be an extraordinarily valuable tool. Current law allows a developer or contractor to engage a private provider to perform the functions of the government building department. Current law also requires counties and cities to reduce their fees when this occurs. We support two bills which aim to clarify existing law, and which penalize local government for refusing to appropriately reduce their fees when a private provider is used.

Buy American: You will find no fiercer and ally in the defense of God and County than the building industry, but continued insistence that contractors use only American made products on government projects hurts America. The products are often not commercially available, or their lead time is so extensive that the project cannot be delivered on time. For the last three years bills have been worked through the legislature to create such requirements, but these bills purporting to support American industry are a ruse. The manufacturing industry has not yet returned strongly enough, and these bills therefore impose unnecessary government red tape whereby contractors must submit mountains of paperwork to convince government of what the people already know. We oppose, as we have for the last two years, this badly timed legislation.

Sunshine 811: Call before you dig! Florida’s utility locate service has been an important tool in the prevention of property damage and jobsite injury, but bills currently underway would weaken and slow the industry. These bills propose to lengthen location and response times. We are opposing these efforts.
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Justin R. Zinzow speaks to NUCA Florida about Claims Preservation.

Justin R. Zinzow speaks to NUCA Florida about Claims Preservation

Whether it is a right to compensation, change order, time extension, or otherwise, it cannot be relegated just to legal professionals or litigation proceedings. By the time construction professionals reach a lawyer, a substantial portion of claims preservation requirements have already been triggered. Construction professionals who overlook these requirements can lose their rights.

This seminar covers:

  • How to Review a Construction Contract;
  • Top 7 Contract Clauses to Look Out For;
  • Additional Claim Preservation Issue; and,
  • Contract Compliance Best Practices.
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New Laws To Live By

New laws to live by - Florida

In his first Inaugural Address, President Thomas Jefferson said that “a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” If 2023’s Legislative Session had a theme, perhaps this was it. Florida’s representative government listened to the will of its people who sought freedom of thought, speech and religion, freedom from oppressive taxes and fees, and freedom for their commercial enterprises. No government perfectly answers the call of all its constituents, yet the calls are near perfectly answered when those elected to serve us choose these themes over all others. Having spent a month in our state capital during this year’s session, as I do every year advocating for the construction industry, I observed this very sentiment at work. It was our government’s dedication to this high purpose that made this session so much different than many others. I hope this legislative briefing will enlighten you as I remain humbly at your service.

Sincerely,

Justin Zinzow

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Septic Systems: You thought the Government was in your “Business” before…

How Florida Septic Regulations Affect Homeowners: 4 Things you need to know.

By: Karen Leonardo, Real Estate & Closing Attorney at Zinzow Law.

The below information is designed to help Florida Realtors and Homeowners learn about proposed government regulations and how they can hinder the sale of an existing home or the construction of a new home.

Septic System Laws Are Complex
In an attempt to protect Florida’s water systems from the ramifications of algae blooms, State and local government authorities are implementing new and more invasive oversight and regulations into homeowners’ use of sewage treatment and disposal systems (“septic systems”). The effort to reduce nitrogen pollution purportedly caused by septic systems is at the forefront of Florida’s environmental issues. As Florida Realtors and Homeowners grapple with a sea of already complex laws and regulations, even more laws are being proposed. Florida landowners with septic systems should become aware of these changes to best prepare for the expense of staying compliant. Here are four things you need to know.
Demystifying Septic System Laws, and Recommended Best Practices
  1. Establish a relationship with a reputable septic tank contractor to upkeep and maintain your septic system. A search for a licensed septic tank contractor is available at http://www.floridahealth.gov/statistics-and-data/eh-tracking-and-reporting/septic-tank-contractors.html. Your contractor can also give you guidance on how to extend the life of your system.
  2. Know which regulations and laws apply to you.
    1. Be on the lookout for a state-wide requirement for onsite inspections every five years. Onsite Inspections may take effect under a proposed bill founded on recommendations set forth by the Blue-Green Algae Task Force.
    2. Determine whether your property lies within a Priority Focus Area identified by the Florida Department of Environmental Protection. Septic systems in these areas are subject to additional regulation through the Water Quality Restoration Program. A PFA search is available at www.floridadep.gov/PFA map. These areas are subject to a Basin Management Action Plan (BMAP), and your county may have a part to play in the enforcement of the plan.
    3. Generally, lots less than one acre in size are subject to a higher level of regulation and scrutiny.
    4. Inquire about remediation and septic to sewer conversion projects your county may consider or study. Some septic areas, particularly those within BMAP areas, may be required to connect their properties to sewer even if a functioning septic system is onsite.
  3. If you are considering building a new home that requires a septic system, you will want to avoid the headache of failing post-permitting inspections. Be sure to consult with your general contractor and a septic tank contractor to ascertain the cost of installing a system that complies with the latest recommendations and requirements set forth by the Florida Department of Health and the Florida Department of Environmental Protection. This is especially significant on lots less than one acre.
  4. For existing septic system owners, plan for repair or replacement well in advance of an emergency. Septic systems can last up to 30 years on average with regular maintenance and upkeep; however, local county health departments have permit requirements that may demand replacement rather than repair of an existing septic system.
This information is meant for you whether you are in Pinellas, Pasco, Hillsborough, Citrus, Polk, Hernando, or any other county in Florida. If you should have any additional questions, please feel free to reach out to Expert Real Estate and Title Closing Attorney Karen Leondardo at Zinzow Law. Kleonardo@zinzowlaw.com, or 727-787-3121.
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Deadline Looming – Claim Your Homestead Exemption

Deadline Looming – Claim Your Homestead Exemption

In Yesteryears, it was sweat and back-breaking hard work that allowed your name to be put on the deed to the 160 acres you could call a homestead, but those days are many decades in the past. Today, however, the homestead has a slightly different meaning. You may not be working the land in the traditional sense; you may be raising a family on a quiet cul-de-sac or living out your golden years in a condo near the beach; in Florida, your homestead is where you lay your head at night and live out your life. It is the American Dream. So, it is vital as a realtor or mortgage broker that you remind or educate your clients about Florida’s Homestead benefit and its deadlines.

The following is a take and paste reminder to share with your new Floridian Homesteader Clients, Neighbors, and Friends! Those who take advantage will thank you for the tax savings for years to come! Out-of-staters or first-time homebuyers are often unaware of the ability to file for a homestead tax exemption in the Sunshine State. This reminder may prove useful to anyone who established a new permanent home in Florida as of January 1, 2022 – including those Floridians who relocated to a new home within the State and are unaware that homestead exemptions do not automatically carry over to a new property.

Beat the rush and start the process to apply for your homestead tax exemption now! The deadline is March 1, 2022, but do not delay. Every county in Florida has its own property appraiser. Each office can have varying requirements to prove your new permanent residency, potentially creating additional steps that must be completed before submitting your application.

The best place to start gathering information is your County’s Property Appraiser’s Office and not the tax collector’s office. You can do this on their website or in person. Access to the recorded deed will be necessary to gather some of the required application information. If your title company has not mailed the original deed yet, or if it has been misplaced, you can access a copy by searching for your property through the property appraiser’s website or searching your name in the county’s official records online.

Commonly requested proof of residence includes your Driver’s license with the updated address, evidence of relinquishing your out-of-state Driver’s license, Florida vehicle tag number, Florida voter registration number, proof of payment of utilities, and bank account mailing address.

Closer to the deadline, lines can get hours long if filing in person, and the online registration process can get bogged down – and after last year’s surge in residents, who knows what to expect! So beat the rush and save some time and money by filing online or taking a trip down to your county’s government center to get ahead of the curve.

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Changes Are Coming to Construction Defect Laws

Proposed Legislative Changes to 558 & the Statute of Repose

America’s Founders in 1776 desired change – change in their government and the laws affecting them and their businesses. They used the power of the pen to craft a representative government where positive change could be made by those willing to serve at the forefront of issues facing their community.

 

Construction is our community, and we have always served at the forefront of positive change, particularly legislative change. Our legal professionals serve on and participate in legislative committees of the Florida Bar and the major construction trade associations, such as Florida Homebuilders Association and Associated Builders and Contractors.

We are a part of the bill drafting process and speak with legislators and their staff about important issues affecting the construction industry. We do not sit on the sidelines, complain about the process, and wait for a response; we go on the offensive to take action.

Desperate for Change | Senate Bill SB 736

On November 2, 2021, Senator Hutson from District 7 filed a Senate bill known as SB 736. This bill can bring much needed change to the Construction industry as follows:

Amends 95.11

  • Amends § 95.11(3)(c) Fla. Stat. to eliminate the extended (or tolling) statute of limitations for actions founded on the design, planning, or construction of an improvement to real property based upon latent defects and eliminates the 10-year statute of repose.
  • Under the current statute, when the action involves a latent construction defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence. 
  • The current statute includes a 10-year statute of repose such that the action must be commenced within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.
  • This proposed revision eliminates the 10-year period, effectively reducing the deadline to file a claim to 4 years.

AMENDS 558.004

Amends the Florida Construction Defects Statute, specifically § 558.004 Fla. Stat., by adding the following provisions:

  • Requires a claimant who rejects a settlement offer to include the reasons for rejecting the offer within the notice rejecting the offer. The claimant must identify any items that were omitted from the offer and state in detail all known reasons why the claimant believes the settlement offer is unreasonable.

  • Allows the person served with a notice of rejection of a settlement offer 15 days to make a supplemental offer and requires the claimant to serve a notice of rejection of this supplemental offer, including reasons for the rejection.

  • Extends the court’s stay of any action until the supplemental process is concluded.
  • Limits claimant’s right to recover attorney’s fees unless the claimant proves by a preponderance of the evidence that, at the time of the offer, additional repairs beyond those offered were necessary to remedy the defect. Also, the attorney’s fee limitation does not apply to any claim for attorney’s fees based on a contract between the claimant and the offeror.
  •  If a claimant accepts an offer or supplemental offer, the claimant must, within 90 days after the acceptance, enter into a contract with one or more appropriately licensed contractors to correct the construction defect(s). The offeror or insurer shall pay the contractor directly for said repairs and the repairs must be completed within 12 months after claimant enters into the contract with the contractor, unless the offeror or insurer and claimant mutually agree otherwise.
  • Creates a new § 558.0045 Fla. Stat., which requires the court, in construction defect litigation, to appoint an expert (e.g. engineer, contractor, etc.) to examine the alleged defect.  The court may not appoint an expert if all the parties object or if the court finds that the cost of the expert outweighs any potential benefits to resolution of the action.  Within 15 days after conducting the examination, or otherwise determined by the court, the expert shall submit a written report with detailed findings to the court and to the parties.  The parties shall compensate the expert, but the prevailing party is entitled to reimbursement from the non-prevailing party.  The expert may not be employed to do the repairs.
  • The claimant must repair a construction defect if claimant receives full compensation for such a repair.  If a claimant receives full compensation and fails to repair the construction defect, claimant is liable to a purchaser of the property for any damages resulting from the failure to disclose the defect.
  • Requires the claimant to serve a notice of claim for any construction defect, by certified mail, return receipt requested, on a mortgagee or assignee within 30 days after service of the notice of claim upon the contractor, subcontractor, supplier or design professional.  If repairs relating to the defect are completed after notice to a mortgagee or assignee is provided, or if any settlement, partial settlement, arbitration award, or judgment is obtained by the claimant, the claimant must provide an additional notice to the mortgagee or assignee, by certified mail, return receipt requested, within 60 days after completion of the repairs or any settlement, partial settlement, arbitration award, or judgment, whichever is later.

What Happens if it passes?

If passed by the legislature, it is important to note these amendments are effective for any action commenced on or after July 1, 2022. However, with respect to any action that would not have been barred under § 95.11(3)(c) Fla. Stat., which is the discovery rule statute of limitations for latent construction defects or 10-year statute of repose, such an action must begin on or before July 1, 2023.

We are encouraged at Team Z, as we see the potential for positive change for our clients. SB 736 is a piece of that potential change, despite being only in its earliest form of a pre-filed bill.  Every year, there are competing, and complimentary bills filed. This bill has to make it through the legislative process, as bills advance, modify, negotiate, or die in committee, on its journey to make it to the governor’s desk to be signed into law. Team Z will do all we can to stand for our clients and for their pursuit of happiness.

If you would like more information about the pending legislation, or what you can do to protect your construction company from construction defect claims, Zinzow Law is here to help.  We protect those who Build America.

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Urgent Legal Bulletin | OSHA Vaccine Mandate



How to Beat an Overreaching Government

What Every Construction Company with More than 100 Employees Must Know Now

You have no doubt heard about the vaccine mandate, about Governors, including Governor Ron Desantis, who intend to challenge it, and may have even heard, in passing, about a court halting the vaccine mandate.  This legal bulletin separates the fact from the fiction and provides you with important information you must know to protect your liberty and your livelihood.  

Crafted by the Framers at the Constitutional Convention of 1787, the preamble of the Constitution begins with “We the People,” a phrase that has transcended American history. A noble phrase, combined with deep emotion and patriotism, breathes life into the fabric of our nation’s fundamental values that the people have the popular sovereignty over the government.

On September 9, 2021, President Biden issued his “Path Out of the Pandemic” memorandum and Executive Order 14042 to the American people, which broke our nation’s centuries long value that We the People decide what is best and not the government. Through the Occupational Health and Safety Act (OSHA), the President is mandating that businesses with over 100 employees must be fully vaccinated against COVID-19 or be subject to weekly COVID-19 testing, while wearing a mask during work hours. Additionally, the Federal government is initiating a rarely-used emergency temporary order (ETS) to streamline this executive overreach onto the American people.

Temporary Stay

On November 6, 2021, the Fifth Circuit Court of Appeals temporarily blocked the OSHA mandate from depriving freedom from hard-working Americans. A three-judge panel issued an emergency stay to prevent the enforcement of the new rule to allow for full briefing and arguments on the merits of the case. 

Regardless, companies with over 100 employees need to be prepared for a legal fight, as the administration will attempt to unconstitutionally justify its means to reach its end, and this stay is temporary only. 

OSHA Covid Ruling

False Justification of Using OSHA

OSHA’s purpose is to ensure workplace and jobsite safety, yet this executive order is political in-nature and does not specifically relate to either. OSHA is being used as a catalyst to further enhance the administration’s agenda to mandate vaccines and to further enhance the Federal government’s grip on American daily life.

While OSHA, a bureaucratic agency, typically takes seven years to create a rule for the workplace, the President’s executive order has been fast-tracked to be fully implemented in just four months. The emergency temporary order has only been issued nine times since it was established in 1971. Of the nine issuances, six were challenged in court and only one order survived the legal system. Each of these challenged orders governed the healthcare facility setting where protecting against medical dangers is a more compelling interest. This remarkable shift in rule-making expands this regulatory overreach to every business with over 100 employees in every sector of our economy.

The agency’s justification to use the ETS is to address a “grave danger,” but this legal standard cannot be upheld. This ETS order affects all employees at any age, whereas the country has been informed from the initial COVID-19 lockdowns in March 2020 through present day, that mostly the elderly were at risk of the disease. Even in the agency’s own conclusions, OSHA reaffirmed that not all workplaces face this grave danger. This grave danger notion is another illegal justification to directly interfere in the lives of everyday Americans.

Right to Privacy

It has been established through the Federal judiciary and legislature that the role of government in the lives of private citizens is to be limited. The right to privacy was established by the Supreme Court of the United States in Griswold vs Connecticut (1965), which has been used as case precedent expanding to other areas of private life. Additionally, Congress has taken the issue of privacy in the healthcare sphere to a vote, as it did in 1996 with the Health Insurance Portability and Accountability Act (HIPPA). HIPPA created national standards that protected patient information from being disclosed without the patient’s consent or knowledge.

The OSHA executive order immediately puts an individual’s choice on display to others. The employee can either comply with the order to obtain the vaccine, which automatically lets the individual enjoy normal life in the workplace, or the individual can subject him or herself to weekly testing and mask adherence. Regardless of the choice, colleagues in the workplace know the individual choice of the employee. This forced disclosure of health information by display breaks the legal standard our nation’s legislature and judiciary has already decided.

Be Ready to Defend Your Company

The OSHA mandate will be enforced through OSHA’s Compliance Safety and Health Officers.   OSHA will issue a Citation but is historically required to give the contractor a reasonable time within which to cure (abate) the violation, though that will not eliminate the penalty if one is assessed.   The abatement period specified by OSHA is often unreasonable, but contractors may petition for modification of the abatement date.  The petition must include a number of details, such as steps taken to abate the issue by that point, the additional time needed, interim steps implemented to safeguard employees during the abatement period, and a certification that the petition for modification has been posted in a manner visible to the contractor’s employees.   This petition must be timely filed or the contractor will have waived its right to seek modification.

The contractor may also wish to contest the Citation in whole or in part.  This may be necessary and prudent because an uncontested Citation may lead to more frequent OSHA inspections and increased fines in the event of future violations.  A Citation may be contested in only two ways: (1) an informal conference and (2) a formal notice of contest.   A formal notice of contest must be initiated with the Assistant Regional Director within fifteen business days of the Citation.  The informal conference does not have any impact on that deadline, so if an informal resolution is to be reached, the contractor must initiate the informal conference quickly.  The contractor has the right to and should be represented by counsel during both an informal conference and the formal contest proceeding. 

The contest proceeding is a formal legal process before the OSHA Review Commission, with a presiding Administrative Law Judge.  OSHA will be represented by legal counsel throughout the proceeding.  These proceedings are governed by complex rules of procedure and standards.   At conclusion of that proceeding, the Administrative Law Judge will prepare a written decision which may be appealed to the appropriate federal circuit court.  

Conclusion

Our country’s founding in 1776 occurred because our colonial past prevented the free expression of choice; the British crown dictated life by government mandates that were not consented to by the governed. Our Founders sacrificed their lives, fortunes, and sacred honor so we, as Americans, could live in a country full of peace, joy, and liberty. The Framers of the Constitution wrote a perpetual reminder to succeeding generations that “We the People” represent the people’s values. And those three words established what our Constitutional Republic was to embody. We the People can choose our leaders. We the People can choose our careers. We the People can choose our own health decisions. It is not the role of the government to dictate how Americans make individual choices; it’s the people’s.

Thankfully our Constitution affords the construction industry relief from the terrible cost a universal vaccine mandate will place on an already strained labor force.  

If you would like more information about the OSHA mandate, the temporary stay, or what you can do to protect your construction company from an OSHA citation, Zinzow Law is here to help.  We protect those who Build America.

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