Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for May 4, 2012
*Western – regional species perimeter foundation; Southern – regional species slab construction.
Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.
Lumber: Strong demand for SPF lumber sent prices higher at mills in both eastern and western Canada. Traders cited better consumption than what yards carrying low inventories into the upsurge had projected. Southern Pine lumber buyers continued to purchase in enough volume to prompt mills to push prices higher for the fourth consecutive week. Wide widths items remained the least supplied. Adding to upward price pressure is the difficulty traders are having finding trucks. Coastal species lumber demand and limited production combined to increase dry prices more than any other single week this year. Meanwhile, some producers were quoting for shipment in the latter half of May. The Inland species lumber market continued to be a "sellers’ market," with order files out two to three weeks and very little inventory in mill yards. Buyers, who traditionally buy direct, had to turn to wholesalers and distributors to cover their needs. Activity in the Moulding and Shop markets was centered more around imports rather than domestic production. Increased activity for Radiata Pine from offshore markets has taken away some volumes that were available to U.S. customers. Ponderosa Pine markets did not see the same activity as Radiata Pine. However, reports of increased buying from door and window manufacturers were reported. Ponderosa Pine board sales were steady in their pace but light in volume. Eastern White Pine producers reported order files out to the week of May 14. Prices were firm, with a few exceptions. Light mill inventories of Idaho White Pine kept prices firm. Buyers of Western Red Cedar discovered availability of some items was tighter than previously. Demand continued to gradually increase, lending to mills seeking moderately higher prices.
Panels: OSB markets were quieter than last week. Although the pace was lighter, mills held prices firm and relied on order files out as far as the week of June 4. Market strength was greater in the North Central and Southwest, where prices were firm or up slightly. Sluggish to moderate sales in the Southern Pine plywood market generated mixed results in regard to pricing. Overall, rated sheathing prices were flat and mostly firm but also negotiated modestly in some instances to keep order files at arm’s length. Sales activity was lackluster in the Western Fir plywood market, but it was enough to edge several sheathing prices a few dollars higher. Price levels kept buyers participating only when necessary, which consisted of conservative volumes for the near term. Light inventories at Canadian plywood mills and order files out to the end of May or early June kept control of the market in the hands of producers. Particleboard and MDF buyers were given notice of upcoming price increases due to particleboard and MDF production cost hikes.
New guidance on criminal background checks
By a 4-1 vote, the Equal Employment Opportunity Commission (EEOC) on April 25, 2012, approved a new guidance on criminal background checks.
Consolidating and superseding previous EEOC guidance on criminal background checks, the guidance discourages blanket exclusions of individuals who have been convicted of crimes and encourages the use of individualized assessments of whether an employer’s criminal conduct exclusion is job related and consistent with business necessity.
However, Commissioner Constance Barker strongly opposed the guidance, saying that the process in developing the guidance wasn’t transparent and should have included a notice and comment period. She noted that the Senate Appropriations Committee had raised concerns about hasty changes to criminal background check guidance and said the guidance exceeds the agency’s authority.
The guidance provides a “major shift in interpreting the obligations of American businesses,” she remarked, saying that the guidance will harm business owners. Barker said she believes that many employers will conclude that they will never conduct a criminal background check unless it is required by federal law. And that in turn will hurt customers and clients because of the business risks that might arise if criminal background checks are not conducted, she cautioned.
Fellow Republican Commissioner Victoria Lipnic disagreed, remarking that the guidance was “worthy of bipartisan support.” Although Lipnic voted in favor of the guidance, saying that it “closely tracks well-known policies,” she did express some reservations about the guidance.
She noted that there should be an appropriate opportunity for individuals to explain past crimes and called this a “wise practice,” but she added that Title VII does not always require an individual assessment. For example, she remarked, a day care center would not need an individual assessment of a child molestation conviction before eliminating the individual from consideration. She expressed disappointment that the guidance did not provide more examples of such lawful practices.
In addition, Lipnic referenced a part of the guidance that provides that Title VII pre-empts a state or local law requiring a criminal background check if the check is not job related and consistent with business necessity. EEOC investigators in the field should “think long and hard before pursuing policies that arise from state law,” she said.
Katharine Parker, an attorney with the New York office of Proskauer Rose and attendee of the commission meeting on the guidance, did not think today’s guidance prohibited employers from drafting criminal background check policies based on state law. But she said that employers should review their procedures and make any necessary tweaks.
Barry Hartstein, an attorney with Littler Mendelson in Chicago, noted that while state laws might in some circumstances be too restrictive and also inconsistent with Title VII, if federal law requires criminal background checks the federal law must be followed.
Job Related and Consistent with Business Necessity
The guidance provides that there are two circumstances in which the commission believes that employers will meet the “job related and consistent with business necessity defense” consistently:
• The employer validates the criminal conduct screen for the position in question according to the Uniform Guidelines on Employee Selection Procedures standards if data about criminal conduct as related to subsequent work performance is available and such validation is possible.
• The employer develops a targeted screen considering at least the nature of the crime, the time elapsed and the nature of the job and then provides an opportunity for an individualized assessment for people excluded by the screen to determine whether the policy as applied is job related and consistent with business necessity.
The individualized assessment would consist of:
• A notice to the person that he or she has been screened out because of a criminal conviction.
• An opportunity for the individual to demonstrate that the exclusion should not be applied because of his or her particular circumstances.
• The employer’s consideration as to whether the additional information provided by the person warrants an exception to the exclusion and shows that the policy as applied is not job related and consistent with business necessity.
Title VII “does not necessarily require individualized assessment in all circumstances,” the guidance provides. “However, the use of individualized assessments can help employers avoid Title VII liability by allowing them to consider more complete information on individual applicants or employees, as part of a policy that is job related and consistent with business necessity.”
The individual’s showing may include information that he or she was not identified correctly in the criminal record or that the record is otherwise inaccurate. Other relevant individualized evidence includes:
• The facts and circumstances surrounding the offense or conduct.
• The number of offenses for which the individual was convicted.
• How much older the person was at the time of conviction or release from prison than when the crime was committed.
• Evidence that the individual performed the same type of work, post conviction, with the same or a different employer, with no known incident of criminal conduct.
• The length and consistency of employment history before and after the offense or conduct.
• Rehabilitation efforts, such as education and training.
• Employment and character references and any other information regarding fitness for the particular position.
• Whether the individual is bonded under a federal, state or local bonding program.
Commissioner Chai Feldblum defended the criminal background check guidance and process for issuing it, noting that subregulatory guidance does not typically go through the notice and comment period. She added that it might be useful to have a public comment period.
She noted that, according to the Department of Justice’s Bureau of Justice Statistics, assuming that incarceration rates remain unchanged, about one in 17 white men are expected to serve time in prison during their lifetime. This rate climbs to one in six for Hispanic men and one in three for black men. “What sort of society is that?” Feldblum asked, noting that the commission has the authority to enforce a civil rights law that prohibits policies that have a disparate impact unless they are job related and consistent with business necessity.
Allen Smith, J.D., is manager, workplace law content, for SHRM.
© 2012 SHRM. All rights reserved.
Sales rise 7% as Masco swings to profit in Q2
Masco Corp. has reported net sales of $1.87 billion for its first fiscal quarter, an increase of 7% over sales of $1.75 billion in the first quarter of 2011.
North American sales increased 9% and international sales increased 1%. In local currencies, international sales increased 5% compared with the first quarter of 2011.
Net income for the quarter, which ended March 31, was $33 million, compared with a net loss of $46 million a year ago.
“Sales in the quarter were positively impacted by volume growth in both our repair and remodel and new home construction channel,” said Masco’s CEO Tim Wadhams. “This growth was driven by share gains, new product introductions and positive housing dynamics. Our results this quarter include solid improvement in margins and earnings per share, reflecting our focus on total cost productivity and the positive effects of our operating leverage. In addition, we took steps to strengthen our balance sheet by issuing debt of $400 million at an attractive rate to partially prefund our July 2012 debt maturity.”
In his outlook for the remainder of the year, Wadhams said: “Our first-quarter results improved compared with last year, and we remain cautiously optimistic for the balance of 2012. We are making progress on our strategic initiatives, which include leveraging our brands, reducing our costs, improving our installation and cabinet segments and strengthening our balance sheet. Our installation and cabinet businesses improved their performance by more than $25 million in operating profit, in aggregate, compared with first quarter 2011. Although the cabinetry business continues to be challenged by aggressive promotional activity and consumers’ deferral of big-ticket purchases, both businesses are benefiting from improved residential new construction and total cost productivity. We continue to believe we will achieve significant improvement in both cabinetry and installation in 2012. Although weak Euro Zone macro-economic conditions remain a concern for 2012, North American housing activity appears to be improving, and we continue to believe we are positioned to outperform the industry recovery.”
Headquartered in Taylor, Mich., Masco is one of the world’s leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products.