New Workplace Rules Require Action

As California’s population grows, the building industry grows and matures with it. While this impressive growth presents enormous opportunities for California builders, it also can present certain employment and workplace challenges. Those challenges include handling a growing workforce, and along with it, the resulting legal complexities. California is the most employee-protective state in the country.

Historically, builders have a tendency to be risk-takers, a trait that is essential to their success. Yet, that very same characteristic has the potential to work against them if it prevents them from taking a long-term view of such vital issues as employment laws. Failing to do so could result in a costly claim or lawsuit being filed by an employee, which can have considerable business consequences. The good news is that these actions can be avoided if an employer begins taking steps now to properly train employees and address potential legal issues before they arise.

Harassment Law

One area in which builders have a variety of legal obligations is harassment law. Recently passed legislation in California requires all employers who have 50 or more employees to provide at least two hours of sexual harassment training to all supervisors by January 1, 2006. For any affected builder who has not yet made arrangements to provide sexual harassment training to its employees, now is the time to begin preparations for such training.

In order for training to be effective, a builder should have an effective and updated written harassment policy upon which the training should be based. Training should not be in the abstract, but instead should focus on policies already implemented by the builder. These policies should advise employees, at a minimum, what sexual harassment is, give examples, and advise employees how to report harassment of themselves or others. The training can then reinforce these policies by explaining to employees how these policies apply on a day-to-day basis.

Barratt American, a San Diego builder with 135 employees, has already begun the process of responding to the new harassment laws.

"In response to the new legislation, Barratt American has already updated our harassment policies and has scheduled dates to train our employees in the new policy and California harassment law," says Donna Rowley, vice-president of human resources at Barratt American.

Harassment law has grown in importance for all California employers, including those in the building industry, in recent years. The California legislature has passed a bill providing that employers may now be held liable not only for harassment by their own employees, but also for harassment by non-employees, such as customers, subcontractors and vendors.

Consequently, builders now must take steps to not only train their own employees about harassment, and to take steps to prevent harassment from occurring within the company, but they are also responsible, under certain circumstances, for preventing or remedying harassment by non-employees. The days when a builder could simply ignore the vulgar jokes by a sub-contractor no longer exist here in California.

California workplace harassment issues can be a minefield and compliance can be thorny, but it is a topic well worth addressing before an employer faces a harassment lawsuit. Failure to address harassment issues may result in added legal liability in the event an employee files a lawsuit. On the other hand, an employer’s steps to prevent harassment may assist in reducing or even entirely dismissing an employee’s claimed damages in a harassment lawsuit.

In the long run, it is simply good business for builders to immediately and proactively address harassment issues in California, rather than dealing with them ad hoc as they arise.


The prospect of facing a public lawsuit by an employee or ex-employee is a daunting one to any employer, particularly in the building industry, where a company’s public image is essential. When a builder is faced with a legal issue involving one of its employees, it is essential to address the issue as quickly, privately and cost-effectively as possible.

One of the best means to achieve these goals is to implement an arbitration program with your employees. Arbitration is a contractual agreement between an employer and its employees to resolve all covered legal disputes, not in a court of law, but before an objective, third party individual known as an arbitrator.

Utilizing arbitration saves both parties many of the hefty costs and administrative delays associated with a lawsuit. In many ways, arbitration closely mirrors the court process — the governing law is the same and the damages available are the same. And there are downsides, including the fact that the arbitrator’s ruling is final and not subject to appeal, and the employer has to pay for the costs of arbitration. However, there are advantages available to the builder in utilizing arbitration that should not be overlooked, including cost savings to the employer, a more flexible and informal process, and the opportunity to conduct the case privately rather than as a matter of public record in the court system.

Many potential plaintiffs and their attorneys view the building industry as having deep pockets. These individuals salivate over the prospect of having a jury of their peers decide the damages that a builder should pay. An arbitration clause removes that possibility, and places the decision as to what damages should be awarded in the hands of a more experienced, and many times practical, decision-maker.

In order to take advantage of arbitration, however, a builder must be proactive. That is, in order to have a case decided by an arbitrator instead of a court, a builder must have its employees agree to arbitration before a lawsuit is filed. Generally, employers accomplish this by promulgating a new arbitration policy and requiring all current employees to sign an arbitration agreement with the employer at one time. Then, when new employees join the company, they are required to sign the same arbitration agreement as well.

Ultimately, while implementing an arbitration program does entail some short-term costs, the long-term benefits should greatly outweigh those costs.

By taking a long-term and proactive view regarding these crucial legal issues, the growing building industry can help avoid the debilitating and disruptive legal expenses caused by an employee lawsuit.

(Editor’s Note: Arbitration is one viable form of alternative dispute resolution; Mediation is another avenue that builders and construction industry business owners may consider, as well.)

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