April 2, 2025

The Site Report - Construction Law Insights, Issue 3, March 2025

Hikmat Al-Chami, Stephanie Eaton, Mark Heath, Steven Hemric, Eric Kinder, Brienne Marco, Nicholas Muto, Julian Neiser, Mitchell Rhein, Peter Rich, Joseph Unger

Spilman Thomas & Battle, PLLC

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Issue 3, 2025

Welcome to our third issue of The Site Report for 2025! In this edition, we address new case law impacting contract provisions in South Carolina, construction-related pricing and tariffs, the new administration's effect on OSHA, the impact of AI and data centers as the genesis of a construction boom, and highlights from the recent North Carolina State Construction Conference. We also took deep dives regarding limited competition, changes at the NLRB, and transparency issues with employee paychecks. We also introduce you to one of our newest team members, James Taylor.

Thank you for reading.

Subcontracting Lessons on Indemnity Provisions, Consistency of Contract Terms and Estoppel From the SC Court of Appeals

By Stephanie U. Eaton and Hikmat N. Al-Chami

The Retreat at Charleston National Country Club Home Owners Ass’n, Inc. v. Winston Carlyle Charleston National, LLC, S.C. App. Case No. 2021-001050, Opinion No. 6099 (Feb. 12, 2025)

Eight motions and partial motions for summary judgment in favor of subcontractors were upheld in this recent construction defect case before the South Carolina Court of Appeals.

Key Takeaways:

Subcontractors, read and understand indemnity provisions in your subcontract agreements with general contractors.
General Contractors, ensure that indemnity provisions are likely to be enforceable against subcontractors and do not require subcontractors to indemnify the General Contractor for its own negligence.
General Contractors, if you use master subcontract agreements, ensure that each subcontractor on a single project is working under the same master subcontract agreement.
All parties, just because a contract has a severability clause, does not mean that a Court reviewing the contract will agree to sever that clause if it is unenforceable to “save the contract.”
All parties, if you have litigated the same contract issue in a prior case, your claim in a subsequent case may be barred by collateral estoppel.
All parties, a judgment in a civil action remains final unless and until it is overturned on appeal.

Click here for the case summary and more details.

Rethinking Pricing as Tariffs Hit

“Some actionable advice for contractors about reassessing pricing policies.”

Why this is important: Tariffs and their impacts on project pricing are a hot topic in light of the current administration’s implementation of increased tariffs on imports from multiple countries, all of which are major sources of construction materials. This article does an excellent job of highlighting several of the potential long-term benefits of these tariffs on the construction industry (e.g. increased demand for projects to support domestic manufacturing, warehouse, and logistics facilities), while also highlighting the immediate negative implications on supply chains and material prices and several responsive actions for construction businesses to take in the short term. Perhaps the most key immediate action items are updating pricing and contract language for upcoming bids/projects, assessing project-specific price escalation risks, and reviewing current contract language to identify price escalation protections. --- Steven C. Hemric

Bill to Abolish OSHA has ‘Zero Chance’ of Becoming Law, Attorney Says

“The legislation from Rep. Andy Biggs will not move forward, an employment lawyer told Construction Dive, but other new policies could affect the federal safety agency.”

Why this is important: A bill recently introduced by Texas Congressman Andy Biggs to repeal the Occupational Safety and Health Act of 1970 that created OSHA is unlikely to pass Congress. The last time the Congressman introduced the same bill, it did not clear committee.

While there will likely be a slowdown in OSHA enforcement due to budget cuts and personnel layoffs, a total elimination of OSHA is unlikely in the new administration. The new administration has attempted to delay new regulations across the board, but most of the new OSHA regulations promulgated by the Biden administration, including the walk-around rule, are now in effect.

The one exception is the new Heat Rule. That rule is not final and expect the new administration to slow down or attempt to stop its implementation.

The Trump administration has nominated David Keeling to be the Assistant Secretary of Labor for Occupational Safety and Health. Keeling has a background in safety with UPS and Amazon. Keeling was most recently the director of global road and transportation safety at Amazon, filling the role from July 2021 to May 2023. The Kentucky native began working at UPS in 1985 and was Vice President of Global Health and Safety from March 2018 to July 2021.

While nominated, Mr. Keeling must still be approved by the Senate HELP committee and then confirmed by the full Senate.

In the meantime, on March 12, Amanda Wood Laihow was appointed as the Acting Assistant Secretary for OSHA. She was previously appointed as Deputy Assistant Secretary for OSHA in February 2025 by President Donald Trump.

Prior to this appointment, she served as a member of the Occupational Safety and Health Review Commission (OSHRC) from 2020 to 2023, having been nominated by President Trump in 2019 and confirmed by the U.S. Senate in 2020. She was re-nominated in July 2023, after her term expired, by President Joe Biden. However, the full United States Senate did not hold a confirmation vote on her appointment and, as of March 2025, the seat she held remains vacant. Laihow previously served as Chief Counsel to former OSHRC Chair James Sullivan and was the Director of Labor and Employment Policy for the National Association of Manufacturers. --- Mark E. Heath

DeepSeek AI will Fuel More Data Center Work

“The Chinese firm’s highly efficient chatbot won’t slow the need for U.S. data centers or the energy projects to power them, experts say.”

Why this is important: The rise of DeepSeek AI and its ability to operate at a lower cost than other artificial intelligence models have many worried about the growth of data center power. Those fears should be put aside as DeepSeek will be one of the factors that facilitate data center power growth. DeepSeek lowers the cost of computing which can potentially increase the number of companies that use the AI model. With the reduced costs, new potential applications for the AI model may emerge.

One major legal consideration is compliance with environmental laws and energy regulations. Governments worldwide are implementing stricter carbon reduction policies, and data centers—historically known for their high energy usage—must adhere to these standards. By integrating energy-efficient designs, companies like DeepSeek AI can mitigate regulatory risks while positioning themselves favorably under green energy incentives and tax credits.

The demand for power construction is rising rapidly alongside data center projects as contractors strive to keep pace with increasing needs. The current U.S. grid was not meant to handle the current level of demand and growth. In addition to the new building of "power islands" designed to house gas energy, solar energy, batteries, and a data center, older power plants once slated for retirement are now being renovated into data power centers. A significant challenge for both new data center construction and the renovation of older power plants is the demand for skilled labor required to build and maintain these facilities. As data center construction increases, competition is not just for projects but also for experienced teams to build them. Contractors must compete for both clients and skilled labor, posing challenges for both developers and builders.

The lack of capacity in the current power grid and the need for more data centers have caught the attention of the Oval Office. President Trump recently issued an executive order declaring an energy emergency aimed at expediting the development of new power generation and transmission infrastructure. As power consumption continues to rise, there may be changes in state and federal regulations to promote or restrict the expansion of data centers and AI usage. --- Nicholas A. Muto

Recap of the NC State Construction Conference

By Stephanie U. Eaton

Each March, our team participates in the North Carolina State Construction Conference in Raleigh, where thousands of construction industry members meet to hear about the current “state of the construction industry” in North Carolina and across the U.S., as well as learn about important code changes, legislation, funding opportunities, and other information relevant to the growing industry. Here are some of the highlights for those of you who missed this year’s event.