Law Offices of Stanley E. Niew, P.C.

attorneys at law

LABOR & CONSTRUCTION LAW UPDATES

These Newsletters are not intended as legal advice since each situation depends specifically on the facts presented. Persons reading these Newsletters should seek competent legal advice with regard to the subjects contained herein before making any employment or other decisions.
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MARCH 2019

Inside This Issue

1. Illinois Minton Rule Reversed

2. Fraud under the Mechanics Lien Act

3. Protecting Trade Secrets by Non-Compete Agreements Subject to Challenge

4. U.S. Department of Labor (“DOL”) on a Role Writing Opinion Letters

Illinois Minton Rule Reversed

Since 1983 in the case of Minton v. The Richard Group, Illinois Appellate Courts have held that a purchaser of a new home or condo could bring a claim directly against a subcontractor when the purchaser had no recourse against the builder-vendor for latent defects caused by the subcontractor provided the builder-vendor no longer existed or had any assets to respond to the claim.

The recent case of Sienna Court v. Champion Aluminum, overruled Minton and ruled that a purchaser of a newly constructed home could not assert a claim for breach of implied warranty of habitability against a subcontractor that had no contractual relationship with the plaintiff-purchaser.

The Minton case was most often used by condo owners to sue subcontractors when the prime contractor no longer existed. The Sienna case was decided by a residential purchaser against a subcontractor. We will have to wait and see what appellate courts will do in the future regarding condo units and the implied warranty of habitability.

Fraud under the Mechanics Lien Act

A construction company filed suit for foreclosure of a mechanics lien, breach of contract and quantum meruit. The defendant discovered that the mechanics lien was more than one-hundred percent overstated which the court concluded was constructive fraud. This invalidated the lien and subjected the plaintiff construction company for damages.

The case of MEP Construction v. Truco was decided February 8, 2019.

Caution: There are other cases which hold that a ten or twenty percent overstatement of a mechanics lien is not constructive fraud.

Protecting Trade Secrets by Non-Compete Agreements Subject to Challenge

In Archer Daniels Midland v. Sinele, decided February 1, 2019, ADM sued for a preliminary injunction against a former employee of 18 years. The former ADM employee did not take anything with him other than his memory of what took place at ADM. The court ruled the identity of buyers is not a trade secret if the identity can be ascertained from public sources. Moreover, the desirability of one customer over another is not a trade secret if their desirability depends on information that a customer could tell you.

Confidentiality and non-compete agreements should be tailored narrowly especially with employees. The rules are somewhat more broad and enforceable in the sale of a business.

U.S. Department of Labor (“DOL”) on a Role Writing Opinion Letters

For nearly 10 years the DOL maintained near dead silence in responding to opinion letters. Suddenly, in 2018 the DOL issued opinion letters at the rate of more than 2.5 a month. The opinion letters cover a variety of topics including FMLA, FSLA, minimum wage, overtime, rest breaks as a reasonable accommodation as well as travel time.

Opinion letters may be sought anonymously through legal counsel when a company needs clarity regarding complicated compliance matters. The opinion letters can be found at https://www.dol.gov/whd/opinion/search/fullsearch.htm.

If your company is operating on the edge of the law, it may be prudent to seek an opinion letter.

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