Cotney Blogs
COTNEY BRIEF JULY 2025
THE COTNEY BRIEF | Construction Law Simplified
Issue 3 · July 2025 | (866) 303-5868 · tcotney@trentcotney.com
- State and Federal Regulatory Changes
- DOL Overtime Exemption Rule in Flux: On April 26, 2024, the U.S. Department of Labor finalized its overtime rule raising the EAP salary threshold to $844 per week on July 1, 2024, and $1,128 per week on January 1, 2025. Multiple business coalitions challenged the rule, and in November 2024, a Texas federal judge vacated the ruling. The Fifth Circuit is set to hear oral argument later this year.
👉 Takeaway: Contractors with salaried field managers should budget for either outcome and prepare to recalculate overtime retroactively if the rule survives.
- California Fast‑Track Housing Package Becomes Law: On June 30, 2025, Governor Gavin Newsom signed a pair of bills amending the California Environmental Quality Act (CEQA) to exempt certain infill housing, child‑care, food‑bank, and wildfire‑mitigation projects from full environmental review. The reforms cut months off project delivery and reduce carrying costs. Builders should update bid schedules for California multifamily and mixed‑use work to reflect the shorter CEQA tail.
👉 Takeaway: Accelerate California infill opportunities before local jurisdictions adjust fees.
- Case Law Update
Supreme Court Limits Lower Court Injunctive Power: In Trump v. CASA, Inc. (June 27, 2025), the Court held 6‑3 that district courts lack equitable authority to issue orders that bar the federal government from enforcing a statute or policy against non‑parties. Injunctive relief must be limited to the plaintiffs before the court unless certified as a class. The ruling curtails forum‑shopping and reduces regulatory whiplash for contractors who operate across state lines.
👉 Takeaway: Expect faster implementation of contested federal rules. Include compliance‑cost contingencies in long‑term contracts.
- Contract Provision of the Month – Design Errors
Context: This clause is your safety net when the plans are wrong. If you spot a mistake in the drawings or specs, send a quick written notice to the owner and architect, pause only the work that the error touches, and wait for revised instructions. Any extra cost you eat or time you lose because of that bad design gets added to the contract price and schedule, and you are not on the hook for damages that flow from relying on owner supplied plans. You still have to flag obvious problems that any experienced contractor would notice, but the ultimate risk for defective design stays with the party that created it. In short, the provision keeps you building, keeps the project moving, and keeps design risk where it belongs:
Errors and Omissions in Design Documents
If the Contractor discovers any error, omission, inconsistency, or code violation in the drawings or specifications, the Contractor shall promptly notify the Owner and the Design Professional in writing, identifying the issue and its likely impact on cost and schedule. The Contractor shall suspend only the affected portion of the Work until the Owner issues written instructions. The Contract Sum and Contract Time shall be equitably adjusted to the extent the Contractor incurs increased costs or delays arising from design defects not created by the Contractor. The Contractor shall not be liable for damages resulting from reasonable reliance on defective design documents furnished by the Owner or its consultants; however, the Contractor remains responsible for alerting the Owner to any patent defects that a competent contractor should recognize before proceeding. Nothing in this provision limits the Owner’s rights against the Design Professional or any third party whose negligence caused the defect.
- Avoiding Criminal Liability for Immigration Issues
Federal prosecutors now treat immigration lapses as a frontline enforcement priority, not a paperwork problem. A February 2025 Department of Justice directive instructs each United States Attorney to deploy every applicable criminal statute against employers that knowingly hire or harbor unauthorized workers, and Immigration and Customs Enforcement has resumed high visibility worksite raids that led to arrests at construction sites in Texas and other states this summer. Felony charges can flow from knowingly employing unauthorized workers, warning crews about an impending inspection, or providing housing or cash that prosecutors cast as harboring. Because prosecutors often layer false statement, obstruction, or wage theft counts on top of the immigration charge, a clerical error can quickly become a multi-count indictment carrying prison exposure and asset forfeiture.
The best shield is a disciplined verification program that works in real time. Complete the current Form I-9 for every new hire, re verify expiring work authorization before the deadline, and consider enrolling in the federal E-Verify system wherever permitted. Many states now require it, and ICE credits voluntary participation when deciding whether to refer a case for prosecution. Back up that paperwork with semiannual internal audits, flow the same standards down to subcontractors with inspection and indemnity clauses, and train supervisors to spot forged documents and to escalate concerns without retaliation. An annual privileged compliance review by outside counsel can surface problems early and fence them within attorney-client privilege, turning potential criminal counts into correctable administrative issues.
👉 Takeaway: Treat immigration compliance like fall-protection: document every I-9, audit twice a year, and flow the same standards to every subcontractor. The paper trail you build today is the best shield against tomorrow’s indictment.
- Upcoming Speaking Engagements & Events
- National Roofing Contractors Association Committee Meetings, Chicago, July 15–18, 2025
- Florida Wall and Ceiling Contractor Association Annual Convention, Orlando, July 24-27, 2025
Disclaimer: This newsletter is for educational purposes only and does not constitute legal advice or create an attorney-client relationship.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.