California Home Improvement Contractors Cover Your Rear

Conflicts happen on the jobsite. Many times the work done is not the problem on the job. As a home improvement contractor or subcontractor, protect yourself by being a good businessperson. Follow these simple hints to cover your rear:

1. Make sure that your contract is up to date. Make sure that your contract complies with the California License Law.
2. If your contract refers to the plans, make sure that your contract is very specific as to exactly what you will and will not be doing on the job with respect to the plans. Otherwise, you may end up responsible for more than you intended to do on the job if there ends up being a conflict between you and the customer.
3. Keep a copy of the signed contract. Keep it at the office in a file so that there is no risk of losing it.
4. Have the customer sign or initial each page of the contract.
5. Make sure you get everything on the job in writing, from start to finish.
6. Make sure that you receive copies of the 20-Day Preliminary Notice from each subcontractor that you hire. If you are the subcontractor, make sure you send the Notice to all of the proper parties so that you can protect your rights.
7. Keep a daily job log documenting what is being done on the job and any conversations that are had with the owner, suppliers, or other contractors. Be specific as to what work was done, if the owner requested something, such as materials delivered. Basically keep a log of anything and everything.
8. Make sure that all of your change orders are in writing and signed by your customer.
9. If you have subcontractors on the job, make sure that any of their change orders are in writing. Get written approval from the homeowner on your own change order before signing off on the subcontractors change order.
10. Make sure that progress payments are timely paid and that you get sign offs.
11. Typically, in California you have 90-days after the day you last did work on the job to file a mechanic’s lien in order to preserve your rights. After filing the lien, you then have another 90 days within which you will have to file the lawsuit. Make sure that you don’t blow your chances of collecting by not meeting statutory deadlines.

These are just general hints and you may need to make additional changes not included here.

Employment Law

In June of 2003, El Pollo Loco sent out documents that set out their dispute resolution policies. The documents contained large texts, in both English and Spanish, along with a drawing that required “the employee and the company use a mediator…” for unresolved conflicts. There was no mention of arbitration.

A later section in smaller print, in English only, and without a drawing, stated, “all employment-related disputes must be resolved through binding arbitration.” This created a conflict in that this was the only form of resolving the dispute permitted and a class action would not be allowed.

A class action suit was filed alleging employment law violations. El Pollo Loco wanted to compel arbitration. However, this was denied based on the fact that the judge deemed that the arbitration clause was unconscionable. El Pollo Loco argued that the provision was not unconscionable.

There are two kinds of unconscionability that were dismissed by the court. Procedural unconscionability looks to “oppression or unfair surprise” and substantive unconscionability looks to “harsh or one-sided terms.” The courts looked at both sides and then chose the one that they believed to be more reasonable.

The court in this case determined that the degree of procedural unconscionability was high, showing the obvious unequal bargaining power between El Pollo Loco and its low-paid employees created some “pressure to sign…and agree.” Making it worse, the court determined that this was without a clear understanding of the terms.

With that said, there appeared to be a lack of informed decision and workers were mislead in the manner in which information was relayed to its people. Therefore the employees won. The court found the arbitration agreement was unenforceable.