AGC's Human Resource and Labor News - February 5, 2015 / Issue No. 01-15 (Print All Articles)

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Davis-Bacon Webinar Recording Now Available

An archive of each session of AGC’s recent two-part webinar on Understanding the Davis-Bacon Act and the New Federal Contractor Minimum Wage Law is now available for purchase and immediate viewing from AGC’s online bookstore. Visit http://store.agc.org/ and search for product codes WB294 and WB295. Be sure to login to see member pricing.

An archive of each session of AGC’s recent two-part webinar on Understanding the Davis-Bacon Act and the New Federal Contractor Minimum Wage Law is now available for purchase and immediate viewing from AGC’s online bookstore.  Visit http://store.agc.org/ and search for product codes WB294 and WB295.  Be sure to login to see member pricing.

The webinar was held on Dec. 9 and 10, 2014.  In the first session (product code WB294), Tim Helm, head of Davis-Bacon enforcement at the U.S. Department of Labor, talked about coverage and compliance issues that present pitfalls for many construction contractors.  In the second session, attorneys David Fortney and Judith Kramer of Fortney Scott LLC discussed issues and best practices in worker classification (paying workers the proper rate) as well as the nuances of the new executive order and regulations establishing a special minimum wage rate for federal contractors.

Also available from the bookstore is the fourth edition of AGC’s Davis-Bacon Compliance Manual.  The 176-page book is a must-have reference for contractors with federal or federally assisted construction contracts.  AGC members can access additional resources on Davis-Bacon for free in the Labor & HR Topical Resources area of the AGC website by selecting the main category “Compensation” and subcategory “Davis-Bacon Act.”


AGC Submits Comments to OFCCP on New Equal Pay Report

On Jan. 5, AGC submitted comments to the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) regarding its proposed rule requiring federal contractors and subcontractors to annually report summary compensation data using a new Equal Pay Report. OFCCP originally published an Advanced Notice of Proposed Rulemaking more than three years ago announcing the desire to create such a tool. The proposed rule is the result of an April 2014 Presidential Memorandum and was published in the Federal Register on Aug. 8, 2014.

On Jan. 5, AGC submitted comments to the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) regarding its proposed rule requiring federal contractors and subcontractors to annually report summary compensation data using a new Equal Pay Report.  OFCCP originally published an Advanced Notice of Proposed Rulemaking more than three years ago announcing the desire to create such a tool.  The proposed rule is the result of an April 2014 Presidential Memorandum and was published in the Federal Register on Aug. 8, 2014.

If implemented as written, the proposed rule will impact covered contractors with more than 100 employees and a contract, subcontract, or purchase order worth $50,000 or more that covers a period of at least 30 days.  On an annual basis, such contractors would have to submit summary employee compensation data by sex, race, ethnicity, specified job categories, and other relevant data points that includes hours worked and number of employees.  OFCCP plans to use the collected data to help direct its enforcement resources.  OFCCP also states in the proposed rule that it will release aggregate summary data on race and gender pay gaps by industry and EEO-1 job category to enable contractors to review their pay data using the same metrics as OFCCP, and take voluntary compliance measures.

The proposed rule references compensation discrimination as the basis for the need of summary compensation data collection from federal contractors.  In the comments, AGC expresses appreciation for OFCCP’s objective to protect workers from possible compensation discrimination.  However, the comments explain that new compensation reporting or disclosure requirements for federal construction contractors are not necessary or reasonable for several reasons:

  • OFCCP audits data and Equal Employment Opportunity Commission claims data do not support the need for such requirements;
  • Compensation paid by federal construction contractors is already regulated by way of the Davis-Bacon Act;
  • Federal construction contractors are already actively increasing wages for all workers in order to recruit and retain skilled labor as well as to comply with the new minimum wage for federal contractors;
  • Tools already exist to help the government and construction companies benchmark compensation;
  • Requested data do not account for a wide variety of factors used to determine compensation such as education, training, experience, industry accreditations, tenure, attitude and job assignment;
  • National wage data are useless for benchmarking purposes in construction due to the highly fragmented, regionalized and project-driven nature of the industry; and
  • Proprietary company information and employee privacy may be compromised.

AGC’s comments ask OFCCP to exempt federal construction contractors from the requirements of completing the Equal Pay Report.  If OFCCP chooses to not honor this request, AGC’s comments ask OFCCP to simplify the requirements of compliance for construction contractors by working with the Department’s Wage and Hour Division to gain access to Davis-Bacon certified payroll data, which contain most of the data desired by OFCCP.   Additional desired data are already collected and maintained by OFCCP.  AGC also suggests amending the certified payroll form.  Either of these approaches to data collection will eliminate new recordkeeping requirements and rely on an existing reporting framework, as directed by the President in the April memorandum.

Should none of AGC’s requests be accommodated, AGC’s comments, at the very least, ask that OFCCP specify in the final rule that federally assisted contractors are not required to complete the Equal Pay Report and that only prime and first-tier construction subcontractors are required to complete and submit the Equal Pay Report, as is the requirement for non-construction contractors.  Furthermore, AGC’s comments ask that workers who are exempt under the Fair Labor Standards Act be exempt from inclusion in the Equal Pay Report because employers do not currently track hours actually worked by those employees and adding this element of tracking will be difficult and burdensome for contractors to implement.

For more information on the proposed rule, including a Fact Sheet and FAQ’s, visit OFCCP’s website.


AGC Urges OFCCP to Simplify Compliance Requirements of Pay Secrecy Rule

On Dec. 16, AGC submitted comments to OFCCP in response to its proposed rule prohibiting federal contractors from retaliating against employees who disclose compensation.  The rule is in response to Executive Order 13665, signed by President Obama in April 2014.  It applies to federal and federally-assisted contracts and subcontracts, as it amends Executive Order 11246.

On Dec. 16, AGC submitted comments to OFCCP in response to its proposed rule prohibiting federal contractors from retaliating against employees who disclose compensation.  The rule is in response to Executive Order 13665, signed by President Obama in April 2014.  It applies to federal and federally-assisted contracts and subcontracts, as it amends Executive Order 11246.

The proposed rule does not compel employees to discuss compensation, nor require employers to publish or disseminate pay data, but protects the rights of employees who voluntarily disclose their own compensation, or that of another employee or applicant.  Employees with access to compensation information for other employees or applicants as part of their essential job function are excluded from protection, unless disclosure is required as a result of an investigation or with regard to discussing their own compensation.  AGC’s comments ask OFCCP to implement compliance requirements that are simple and non-burdensome for contractors.  Specifically, AGC requests that OFCCP eliminate the policy dissemination and posting requirements required for applicants, as well as any management training requirements suggested in the proposed rule.  Instead, AGC asks OFCCP to consider contractors in compliance when the revised Equal Opportunity Clause (EO clause) is included in covered subcontractors contracts and purchase orders, and by posting a revised Federal Poster for employees.

The proposed rule also obligates prime contractors to enforce the new EO Clause as directed by OFCCP.  As a result, AGC’s comments ask OFCCP to insert language into the final rule that will eliminate risks to prime contractors and to project efficiency when subcontractors and vendors are removed for noncompliance with the EO.

For more information, please contact Tamika Carter at (703) 837-5382 or cartert@agc.org.


OFCCP Clarifies VEVRAA Self-Identification Requirements

Recently, the U.S. Department of Labor’s Office of Contract Compliance Programs (OFCCP) posted information on its website alerting contractors that they are no longer required to invite applicants to self-identify with a particular category of protected veterans post-offer. The posting came in the form of an update to its Frequently Asked Questions page regarding the regulations set to enforce the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). The regulations went into effect in March of 2014.

Recently, the U.S. Department of Labor’s Office of Contract Compliance Programs (OFCCP) posted information on its website alerting contractors that they are no longer required to invite applicants to self-identify with a particular category of protected veterans post-offer.  The posting came in the form of an update to its Frequently Asked Questions page regarding the regulations set to enforce the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).  The regulations went into effect in March of 2014.

In a Jan. 20 announcement, OFCCP stated that the decision to eliminate this requirement came in response to contractor inquiries after the Veterans’ Employment and Training Service (VETS) replaced the VETS-100A form with a new VETS-4212 form.  (For background on the VETS action, click here.)  As a result, OFCCP indicates in the FAQs that “since the new VETS-4212 report no longer requires contractors to provide [post-offer self-identification] information by the individual protected veteran categories, contractors are [no longer] required to invite self-identification by category in order to comply with VEVRAA’s post-offer invitation requirement. Rather, contractors need only invite those offered a job to indicate whether they are protected veterans under any of the VEVRAA categories.”

Additionally, OFCCP clarifies that while contractors are no longer required to invite veteran self-identification by protected veteran categories, contractors may choose to continue to invite applicants to voluntarily self-identify the specific category or categories of protected veteran to which they belong at the post-offer stage, so long as the contractor also provides VETS with the aggregate protected veteran data required by the new VETS-4212 form.

For more information on OFCCP’s VEVRAA regulations, click here, here, and here.


NLRB Issues Final “Quickie Election” Rule

The National Labor Relations Board (“Board” or “NLRB”) has issued a final rule revising union representation case procedures to unions’ advantage. As anticipated, the final rule is nearly identical to proposed rules issued in February 2014 and in June 2011. The rule is published in the Dec. 15, 2014, issue of the Federal Register and is due to take effect on April 14, 2015. AGC and AGC-supported coalitions opposed the rulemaking and are exploring efforts to block implementation.

The National Labor Relations Board (“Board” or “NLRB”) has issued a final rule revising union representation case procedures to unions’ advantage.  As anticipated, the final rule is nearly identical to proposed rules issued in February 2014 and in June 2011.  The rule is published in the Dec. 15, 2014, issue of the Federal Register and is due to take effect on April 14, 2015.  AGC and AGC-supported coalitions opposed the rulemaking and are exploring efforts to block implementation.

The rule – often called the “quickie election” or “ambush election” rule – expedites the process in cases where a union files a petition for an election to become the exclusive collective bargaining representative of a unit of workers.  Among the numerous changes rendered, the rule:

  • shortens the time between the union’s filing of the petition for an election and the holding of any pre-election hearing;
  • limits issues to be litigated at a pre-election hearing to questions concerning the appropriateness of the unit and defers disputes over voter eligibility until after the election;
  • requires employers to file position statements on a variety of issues before a hearing;
  • expands the information that employers must give unions to include e-mail addresses and telephone numbers; and
  • renders post-election review by the Board discretionary.

The Board asserts that the rule removes “unnecessary barriers to the fair and expeditious resolution of representation cases” by making procedures simpler, more transparent, and uniform across regions.  It has published a fact sheet on the rule, including a chart comparing current procedures to new procedures.

Regardless of the true objective, the effect of the rule is to render union organizing easier by limiting employers’ opportunity to communicate with workers, limiting employees’ opportunity to gather and consider information about union representation, and enhancing unions’ modes of communication with workers.  In the construction industry – where most union contractors operate under “prehire” or “8(f)” collective bargaining agreements – unions may use the changes not only to organize open-shop contractors but to limit union contractors’ flexibility by converting from 8(f) to 9(a) relationships.  (For an explanation of the difference between 8(f) and 9(a) relationships, go to AGC’s online library of Labor & HR Topical Resources, the select the main category “Collective Bargaining” and the subcategory “Collective Bargaining:  8(f) vs. 9(a).”)

The Coalition for a Democratic Workplace, of which AGC is a member, plans to file a legal challenge in the coming days.  AGC and others in the business community are contemplating additional avenues for preventing implementation of the rule, such as seeking Congressional action, and will alert members of any changes in the status of the rule.

In the meantime, employers are well-advised to examine employee relations, identify and promptly remedy problems.  For open-shop contractors, this includes reviewing wages and benefits to ensure they are competitive.  Union contractors may not alter wages, hours, and terms of conditions of employment without first bargaining with the union, but should still examine and identify problems to address in bargaining.  They should also assess relationships with and among the various local unions in the area, taking heed of any discord that could lead one union to file an election petition in an effort to thwart a rival union.  All employers should also keep an eye out for organizing activity and train statutory supervisors about what they lawfully may and may not do when such activity is underway.  (For information on supervisor “do’s and don’ts,” visit the Labor & HR Topical Resources library, and select the main category “Unions/NLRA” and the subcategory “Union Organizing Campaigns & Representation Elections.”)

For more information, contact Denise Gold, Associate General Counsel, at (703) 837-5326 or goldd@agc.org.


AGC-Supported Groups Sue NLRB Over “Quickie Election” Rule; AGC to Cover Rule at Upcoming Convention

Two AGC-supported employer groups and other interested parties have jointly filed a lawsuit challenging the National Labor Relations Board’s new representation-case procedures rule. The rule – often called the “quickie election” or “ambush election” rule – expedites the process in cases where a union files a petition for an election to become the exclusive collective bargaining representative of a unit of workers.

Two AGC-supported employer groups and other interested parties have jointly filed a lawsuit challenging the National Labor Relations Board’s new representation-case procedures rule.  The rule – often called the “quickie election” or “ambush election” rule – expedites the process in cases where a union files a petition for an election to become the exclusive collective bargaining representative of a unit of workers.

The lawsuit was brought in the U.S. District Court for the District of Columbia by the Coalition for a Democratic Workplace and the U.S. Chamber of Commerce, both of which AGC is an active member, along with the National Association of Manufacturers, the National Retail Federation and the Society for Human Resource Management.  The complaint asserts that the rule violates the National Labor Relations Act, the Administrative Procedure Act, and employers’ constitutional rights to free speech and due process.  Among other claims, the complaint challenges the rule as impermissibly limiting employers’ rights to communicate with employees about unionization by dramatically shortening the period between the filing of a union election petition and the holding of the election.

AGC will hold a session about the rule during its 96th Annual Convention in San Juan, PR, on March 18 at 2:30 p.m.  Attorney Rick Samson of Ogletree Deakins will explain what the rule does, how it affects both open-shop and union construction contractors, and how contractors can minimize associated risks.  To register for the convention or get more information, go to http://meetings.agc.org/convention.

For more background on the rule and AGC’s comments opposing the rule, click here and here.


AGC-Backed Pension Reform Signed Into Law

On December 16, 2014, the president signed into law the $1.1 trillion spending bill, which eventually passed both the U.S. House and Senate after a tumultuous week filled with partisan politics on unrelated provisions. This nine-month bill funds federal agencies through the end of the fiscal year with the exception of the Department of Homeland Security – which is only funded through Feb. 27. The new law includes a series of association-backed multi-employer pension reforms, all designed to allow employers and employees the opportunity to protect and improve retirement programs.

On December 16, 2014, the president signed into law the $1.1 trillion spending bill, which eventually passed both the U.S. House and Senate after a tumultuous week filled with partisan politics on unrelated provisions. This nine-month bill funds federal agencies through the end of the fiscal year with the exception of the Department of Homeland Security – which is only funded through Feb. 27. The new law includes a series of association-backed multi-employer pension reforms, all designed to allow employers and employees the opportunity to protect and improve retirement programs.

The pension provisions included in the Multiemployer Pension Reform Act of 2014 were largely based off a national labor-management commission, the National Coordinating Committee of Multiemployer Plans’ Retirement Security Review Commission, which met over an 18-month period to develop reforms to the multiemployer plan system. AGC had a representative on the commission, which studied the challenges facing the multiemployer pension system and designed a series of recommendations that safeguard retirement security and specifically address the challenges facing multiemployer plans. In February 2013, the Commission released the report, “Solutions Not Bailouts: A Comprehensive Plan from Business and Labor to Safeguard Multiemployer Retirement Security, Protect Taxpayers and Spur Economic Growth.” Following the release of the report, AGC testified before Congress and lobbied with other stakeholders to enact the ‘Solutions Not Bailouts’ proposal into law. The culmination of those efforts concluded on Tuesday, when the legislation was signed into law.

Proposals enacted include: technical corrections and enhancements to PPA and prior laws; provisions for mergers of plans when heading for insolvency; and remediation measures for critical and declining plans (provides trustees the authority to suspend benefits if doing so would avoid plan insolvency).

The act also expands PBGC partition authority of eligible multiemployer plans and includes a premium increases for multiemployer plans. The premium increase was added to the bill and was not an original recommendation from the commission. The premiums for the PBGC multiemployer guaranty fund would increase from $13 to $26 per participant for the plan year beginning after Dec. 31, 2014, and would subsequently be indexed.

A significant provision proposed in ‘Solutions Not Bailouts’ not a part of the final legislation was the inclusion of new structures to foster innovative plan designs. The new plan design concept was among AGC’s top priorities and was, unfortunately, dropped prior to the enactment of the law. However, AGC has received favorable reaction from Congressional leaders that the new plan design concepts will be debated and addressed early in the next Congress. The reason for its omission from the final law was not policy related.

For more information, please contact Jim Young at (202) 547-0133 or youngj@agc.org.


Collective Bargaining in 2014 Yields Average First-Year Increase of 2.3%

Construction-industry collective bargaining negotiations settled during 2014 resulted in an average first-year increase in wages and benefits of $1.07 per hour or 2.3 percent, according to the annual year-end Settlements Report issued by the AGC-supported Construction Labor Research Council. For newly negotiated multi-year contracts, the average negotiated second-year increase was $1.31 or 2.4 percent, and the average third-year increase was $1.37 or 2.5 percent.

Construction-industry collective bargaining negotiations settled during 2014 resulted in an average first-year increase in wages and benefits of $1.07 per hour or 2.3 percent, according to the annual year-end Settlements Report issued by the AGC-supported Construction Labor Research Council.  For newly negotiated multi-year contracts, the average negotiated second-year increase was $1.31 or 2.4 percent, and the average third-year increase was $1.37 or 2.5 percent.

For all three contract years, the average increases negotiated in 2014 measured by dollar amount were higher than those negotiated in 2013.  On a percentage basis, the first-year average negotiated in 2014 was modestly higher than that negotiated in 2013, while the second- and third-year averages negotiated in 2014 were modestly lower than those negotiated in 2013.  The number of settlements for a zero-increase in compensation continued to decline from the recent high point in 2010.

Regionally, the area reporting the lowest average first-year increase in 2014 by dollar amount was the South Central Region (AR, LA, NM, OK, TX) at $0.66, and the area reporting the highest was the Southwest Pacific Region (AZ, CA, HI, NV) at $1.53.

By craft, the lowest average first-year increase by dollar amount was negotiated by the Bricklayers at $0.76, and the highest was negotiated by the Operating Engineers at $1.41.

The full report is available via the link embedded above and, along with other CLRC reports, in AGC’s online Labor & HR Topical Resources library at http://www.agc.org/topicalresources (under the main category “Collective Bargaining” and subcategory “Collective Bargaining Agreements Data”).  The report contains additional data and charts, as well as information about custom research and CLRC’s consulting services.

For more information, please contact Denise Gold, Associate General Counsel, at goldd@agc.org or (703) 837-5326.


Union Affiliation in Construction Rises in Number but Declines in Percentage; Union Workers’ Earnings Rise More than Non-Union Workers’

Union representation in the construction industry fell from 14.9 percent to 14.7 percent in 2014, according to a recent report from the Bureau of Labor Statistics (BLS). The number of union-represented workers in the industry actually rose over the year (from 967,000 to 1,023,000), but at a lower rate than the rise in the total number of workers employed in the industry (from 6,474,000 to 6,968,000). Likewise, the number of workers in the industry who were members of a union increased over the year (from 915,000 to 968,000) while the percentage fell (from 14.1 percent to 13.9 percent). In 2013, union representation rose in the industry (from 13.7 percent to 14.9 percent) as did union membership (from 13.2 percent to 14.1 percent).

Union representation in the construction industry fell from 14.9 percent to 14.7 percent in 2014, according to a recent report from the Bureau of Labor Statistics (BLS).  The number of union-represented workers in the industry actually rose over the year (from 967,000 to 1,023,000), but at a lower rate than the rise in the total number of workers employed in the industry (from 6,474,000 to 6,968,000).  Likewise, the number of workers in the industry who were members of a union increased over the year (from 915,000 to 968,000) while the percentage fell (from 14.1 percent to 13.9 percent). In 2013, union representation rose in the industry (from 13.7 percent to 14.9 percent) as did union membership (from 13.2 percent to 14.1 percent).

BLS also reports that the percentage of union-represented workers in construction and extraction occupations – whether employed in the construction industry or another industry – declined in both number (from 1,181,000 to 1,167,000) and percentage (from 20.3 percent to 18.8 percent) in 2014.  The total number of workers employed in such occupations rose from 5,809,000 to 6,196,000.

The construction industry continues to have one of the highest union representation rates among private industries reported by BLS, exceeded only by the utilities, transportation and warehousing, and telecommunications industries.  Union representation across all private-sector industries dropped to 7.4 percent in 2014 from 7.5 percent in 2013, which was an increase from 7.3 percent in 2012.  Only 6.6 percent of all employees in the private sector were union members in 2014.

The median weekly earnings of workers in the construction industry rose all around, with union-affiliated workers’ earnings rising at a higher rate than unaffiliated workers’ earnings, BLS data reveal.  The median for all workers in the industry, regardless of union affiliation, rose from $762 to $775 in 2014.  For union members, it increased from $1,096 to $1,123; for union-represented workers, it increased from $1,081 to $1,108; and for non-union workers, it increased $713 to $724.  Earnings likewise rose all around for workers in construction and extraction occupations.

Assessments of BLS industry data should consider that such data cover surveyed employees at all levels and classifications, including personnel that are not typically organized, such as office clerical workers, professional staff, and executives.  The data also cover all sectors of the industry, including residential construction.

For the full report from BLS, click here.  For additional breakdowns of BLS data on union representation, including industry data broken down by state, click here.


NLRB Provides New Guidance on Personal Use of Email

The National Labor Relations Board (NLRB) recently issued a controversial decision that employees may use their employer’s email system(s), during non-working time, to communicate with each other about workplace issues, such as wages, union organizing efforts, and other terms and conditions of employment. The decision, in Purple Communications, Inc., 361 NLRB No. 126, reversed the NLRB’s 2007 decision in Register Guard, 351 NLRB No. 70, which had held that employees have no statutory right to use their employer’s email system(s) for non-business purposes.

The National Labor Relations Board (NLRB) recently issued a controversial decision that employees may use their employer’s email system(s), during non-working time, to communicate with each other about workplace issues, such as wages, union organizing efforts, and other terms and conditions of employment. The decision, in Purple Communications, Inc., 361 NLRB No. 126, reversed the NLRB’s 2007 decision in Register Guard, 351 NLRB No. 70, which had held that employees have no statutory right to use their employer’s email system(s) for non-business purposes.

The NLRB premised its shift in policy on the growing importance of email as a means of workplace communication, noting that “e-mail remains the most pervasive form of communication in the world.” Indeed, the NLRB suggested that most employers already accept or at least tolerate some personal use of the employer’s email system(s).

The NLRB’s decision has a few caveats. First, the decision only applies to employees. Employers are not required to allow non-employees, such as union organizers, access to their email system(s) for purposes of communicating directly with their employees. Second, the NLRB’s decision applies only to employees who have already been granted access to the employer’s email system(s) in the course of their duties. The decision does not require employers to provide email access to their employees.

Employers may also rebut the presumption that employees are permitted to use the employer’s email system(s) by showing special circumstances exist that allow the employer to institute a complete ban on non-work email use. Although the NLRB did not say what might constitute “special circumstances,” the NLRB explained that the exception would only apply in rare cases. In more typical cases, employers may apply uniform and consistently enforced controls over their email system(s) to the extent that such controls are necessary to maintain production and discipline, such as prohibiting large attachments and/or audio/video segments, if the employer can demonstrate that they would interfere with the email system’s efficient functioning.

In light of the NLRB’s decision, employers should review their employment policies to ensure that it complies with this decision. If the employer maintains any policy that prohibits personal use of its email system(s) during non-working time, the policy would constitute a per se violation of the NLRA. 

Editor’s Note:  This article was written, and is reprinted with permission, by the law firm of Susanin, Widman & Brennan, P.C., located in Wayne, PA.  Susanin, Widman & Brennan, P.C., concentrates its practice in labor law, employment law, employee benefits, and construction law.  In addition to construction claims and litigation, the firm provides advice to and representation of management in employment discrimination litigation; sexual and other forms of harassment claims; wage and hour investigations; occupational, safety and health inspections; employee benefits; unfair labor practice charges; collective bargaining negotiations; and labor disputes, union campaigns, strikes, pickets, grievances and arbitrations.  Its practice is national in scope, and its clients range in size from small, privately held businesses to Fortune 500 companies.  Visit Susanin, Widman & Brennan at www.swbcounsellors.com.


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