Common Misconceptions on Nevada Employment Law and Things Every Employee Should Know

            I am routinely amazed at the amount of smart, educated people who have drastic misconceptions about their employment rights. The following is a brief discussion in plain English of a few things that everyone should know about employment law in Nevada and some advice on how to handle a potential employment dispute.

Nevada, like virtually every state, is an “at-will” employment state.

                Many people I encounter think that Nevada employers need to have a good reason to fire you, but that simply is not true. The truth is they just need to not have a “bad reason” to fire you. “At-will employment” means that you and your employer can terminate your employment relationship at any point, for any reason, with or without notice. A lot of people automatically feel like this is unfair – shouldn’t your employer need a good reason to fire you? Most of us would agree, but what about the other side of the equation: do you need a good reason to quit? In an at-will employment position, you can quit whenever you want without giving notice, just like your employer can fire you whenever it wants (subject to some limitations discussed below) without notice. It seems unfair when you’re on the wrong end of an arbitrary termination, but it doesn’t seem unfair when you quit your job to get higher pay somewhere else. If you were subject to an employment contract, you could be denied the opportunity to take that higher paying job or you could theoretically owe money to your employer for the costs incurred by you breaking your contract. So I always tell people to be careful what you wish for – employment contracts aren’t always everything they’re cracked up to be. 

At-will employment and “right to work” are two very different things.

                Because Nevada is such a strong union state, a lot of people confuse “at-will” employment and “right to work,” but these are actually two very different things. “Right to work” just means that Nevada does not allow anyone to compel you to join a union to secure employment.  At-will employment is discussed above. Nevada is both an at-will employment state and a right to work state.

At-will employment does not mean there are no limitations on why your employer can fire you.

                Nevada has some exceptions to the at-will employment doctrine, however, that can potentially protect you: implied contracts and public policy exceptions. Implied contracts arise when your employer, through written or oral communications, indicates to you that your job is secure in some way. These types of implied contracts can be found in a variety of circumstances, such as when an employer states that you will only be fired for just cause, if the employee handbook includes a finite list of reasons for which you can be terminated, or if your employer pledges to only terminate you after progressive discipline is enacted. Trying to prove such contracts can be an uphill battle, though, and most employers are smart enough to write their employee handbooks with disclaimers.

                Public policy exceptions are situations where a court determines that Nevada has a strong interest in stopping someone from being fired for some act. Reporting illegal behavior, refusing to violate the law, or filing a worker’s compensation claim are a few of these exceptions. As you can probably tell, however, these exceptions usually only arise in “last resort” situations. You don’t want to plan to rely on public policy, because by that point you’re probably already in a bad position with your employer.

Advice on Handling a Potential Employment Dispute

                Employment law is one field of the law where the so-called “bright-line rules” can be elusive. This field involves a case-by-case analysis that considers the entire context of your situation, so it’s difficult to give blanket advice on how to handle any given situation – and be wary of those who tell you otherwise. The best advice you can get is:

·         Take a conservative approach when it comes to evaluating your rights and remedies in the workplace. This means you shouldn’t rely on anything unless you’ve got it in writing or there has been clear and convincing support given by someone with the power to speak on behalf of your employer.

·         Don’t listen to what happened to someone else and assume it applies to you – that person had his or her own context that you may not fully appreciate.

·         Document everything. If you think you’re headed for an employment dispute, start keeping notes of conversations and save e-mails on a separate device if you can.

·         Don’t consider suing anyone for revenge or because you feel you were treated unfairly. Only file suit if you have concrete and provable money damages. Otherwise litigation is guaranteed to be more headache than redemption.


Changes to Nevada’s Construction Defect Law – What Does it Mean for Homeowners?

As you probably have heard, Governor Sandoval recently signed into law Assembly Bill No. 125 (“AB 125”) that drastically changed the landscape of construction defect claims in Nevada. Nevada had been at the forefront of pro-homeowner legislation for about two decades in this field. Lawyers flocked to Nevada to practice construction defect law because of the drastic increase in the number of cases Nevada’s “Chapter 40” statute had brought about.  AB 125 was passed for many reasons, but the primary purpose was undoubtedly to curb that trend.

There are many provisions of the Bill that will have a substantial impact on litigation in Nevada, but the most important provision for the general public is certainly the changes to the statute of repose. A statute of repose is a lot like a statute of limitation, which is the more familiar term to most. It sets a deadline for an injured party to bring his or her claim. If you don’t file a lawsuit or do something else to toll (postpone) the statute, then you could be barred from filing a lawsuit.

Under the old system, homeowners would have anywhere from 6-12 years after purchasing their new home from a builder to bring a construction defect lawsuit. Construction defect lawsuits included everything from minor issues, like paint peeling, all the way to the big problems, like foundation cracking. Due to the statute of repose, you would see homeowners that were nearing the end of their statutory period filing lawsuits to “preserve” the statute and get the builder to come out and repair anything that was wrong with their home (or, in the alternative, write a check). Many times these lawsuits will act as a whole-home checkup and facelift because the definition of a “construction defect” under the statute was so broad that almost anything could qualify. The threat of attorney fees and expert fees encouraged homebuilders to pay substantial settlements just to get rid of the claims.

The problem with the old statute of repose was that the language of the statute was so poorly written that no one could be 100% certain of when their home was beyond the statute. I won’t bore you with the finer points of the law here, but the concept of the statute was a good one: defects that were obvious had shorter statutory periods and hidden/concealed defects had longer periods. The execution of this plan was horrible, however, and most lawyers in Las Vegas just assumed that any owner of a home built less than 12 years ago was capable of filing a lawsuit. 

This is all gone now. In AB 125, the legislature has changed it to one uniform statute of repose: six years from substantial completion of your home. Substantial completion is essentially the date that your home is fit for occupancy, and is defined in the statute in more detail. This statute is going to apply retroactively, meaning that it will apply even to homes that were built before AB 125 was passed.  So if your home was built from 2003 - 2009, this law will bar you from filing a lawsuit against the builder in the very near future.

There is a one-year grace period built into the new statute, however, to protect homeowners who may be affected by this drastic change of policy. If your statute of repose is set to expire this year and your claim “accrued” prior to the effective date of AB 125 (which is February 24, 2015) you may still be able to file a lawsuit as long as you do it quickly.   

I have litigated thousands of homes in construction defect litigation here in Nevada, representing clients who sue and who get sued, and I was initially very happy to see reforms being made to construction defect law in Nevada. The system that was designed to protect homeowners was routinely abused to the point where even well-built, quality homes were joining construction defect litigation and putting small businesses into bankruptcy. The majority of the changes are good ones, which should help builders and insurance companies return to Nevada and help our economy grow over the next decade.

I believe the change to the statute of repose was a mistake, however. There needed to be revisions to the statute of repose, but reducing it to a blanket six years goes too far. I have litigated hundreds of homes that didn’t show any signs of soil movement or structural damage until the homes were at least 4-5 years old. My top civil engineer expert witness has repeatedly said that many homes with expansive soils will not show their full signs of damage until five years or more after construction.

The best advice I can give you if your home was built from 2003-2009 is to take the time now to investigate your home. Have a home inspector come out and check your home or talk to a construction expert and have him or her take a look around your home if possible. Most of us cannot possibly identify signs of problems that are on the horizon; we can only spot the most obvious of defects. Hopefully your home is in great shape and you’ll have the peace of mind that comes with having it inspected. If not, the time to act is now. There is no guarantee you will succeed on your claim, but you will lose your right to even try if you don’t take action this year. 

- Andrew R. Muehlbauer, Esq.