Mark Lies Published in Real Estate Finance

In the October issue of Real Estate Finance, “Will the Construction Industry Catch Avian Flu?” Mark Lies discusses the illness as a potential threat to the health of businesses and their workforces, particularly in construction. In an Avian Flu pandemic, he warns, half of a workforce could fall ill and cause a construction project to come to a screeching halt. Although Avian Flu is found almost exclusively among birds, cases of human infection occur, resulting in flu-like symptoms such as coughing, fever, extreme fatigue, sore throat, and muscle and joint aches, and even life-threatening symptoms such as pneumonia and severe respiratory illness. Mark cites the World Health Organization (WHO) statistic of 128 human deaths from Avian Flu as of June 6, 2006.

Possible coinfection of the Avian Flu and lack of immunity among humans would mean much higher infection rates than season epidemics of normal flu. In the event of an Avian Flu pandemic, it would be especially difficult to find temporary and replacement workers for an affected construction crew, due to collective bargaining agreement limitations and laws that mandate new work policies and absentee worker assistance.

Employers are obligated under the Occupational Safety and Health Act (OSHA) to provide a workplace free from “recognized hazards,” so any employer with workers likely to be exposed to Avian Flu (such as a construction site located on a poultry farm), would need to develop procedures based upon a “hazard assessment” of potential exposure at the worksite that protect its employees. Since employees who would contract Avian Flu while at work would be entitled to receive temporary disability benefits in place of wages, medical treatment, and a reward for any resulting permanent disability, employers should evaluate the adequacy of their worker compensation insurance coverage. For employers with more than 50 employees, Family and Medical Leave Act (FMLA) benefits would apply; if the employee develops a disability because of Avian Flu, then the Americans with Disabilities Act may apply.

Owners and contractors should review their contracts to ensure that they contain a force majeure clause, which protects a party from fault should it miss a deadline for a project due to circumstances outside of its control, in many instances called an “Act of God.” In general, these circumstances make it physically impossible to complete the work, not merely more expensive. Whether Avian Flu would fall under a force majeure clause is questionable and has not been adjudicated.