Carpenters Union Agrees on Pay Cuts

by Matthew Schuerman

NEW YORK, NY June 26, 2009 —Thousands of the city's unionized construction workers have agreed to accept lower wages for the promise of more work. The latest concession goes further than a labor agreement from last month that froze wages and limited overtime.

The Building and Construction Trades Council wouldn't give out any information before deadline on which unions would be affected, but WNYC's Matthew Schuerman has details on one union.

REPORTER: Union officials confirmed that the 21,000 member carpenters union has reduced hourly wages from about $43 to $41, and taken an additional $2 hit off of their benefits package.

The lower wages only apply to a handful of projects that were in danger of stalling. One example is Frank Gehry's Beekman Tower in Lower Manhattan, where developer Forest City Ratner was even contemplating building only half of the original height.

Other trade unions say they will take similar action if it means preserving their members jobs.

CARPENTERS UNION ENDORSES BLOOMBERG FOR MAYOR

Looks like they're coming out of the woodwork to support Mayor Bloomberg.

The New York City District Council of Carpenters, which has over 25,000 members, announced this morning that it is endorsing Bloomberg for re-election this November.

"Mayor Bloomberg has the skill and experience to lead New York City through difficult times," Michael Forde, the union's Executive Secretary Treasurer said in a statement.

"Over the last four years, Mayor Bloomberg has been a fighter in our corner. He has made job creation ... a priority issue, and because of that, members of the carpenters' union -- and their families -- have been able to weather this difficult economy far better than our counterparts in other parts of the country."

Judge Finds District Council in Contempt - Request System Abolished

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, as follows:

1. The District Council and Peter Thomassen, its president, are adjudge and held in contempt of this court for violating the 1994 Consent Decree by bargaining away the job referral rules.

2. The current Request System, under which contractors have the unfettered right to "request" anyone they want from the out-of-work list, is abolished.

3. Allow the contractor to select particular carpenters for a job up to but not in excess of 67 percent of the total carpenter work force. That percentage is made up of the contractor's 50 percent under the 50/50 Rule, and an additional 17 percent, representing one-third of, and to count against, the Union's 50 percent. The remaining 33 percent of the carpenter work force will be assigned by the Union from the OWL.

4. Restore the six-month provision contained in Job Referral Rule 5(B), so that a contractor cannot request a carpenter and have that carpenter count against the Union's 50 percent unless that carpenter has been employed by that contractor during the previous six months. But under no circumstances may carpenters chosen under Rule 5(B) count against the 33 percent assigned by the Union directly from the OWL.

This resolution is fair and equitable because it recognizes contractors' economic and competitive concerns by allowing them to select most of the carpenter work force on any particular project, while restoring the Out-of-Work List as a meaningful source of employment for carpenters seeking work.

To read judge Haight's full order click here.

To read the Memorandum click here.

Related: History Lesson 101.

New Fines Pit Carpenters Against Union Leaders

By PAUL von ZIELBAUER

The union representing New York City carpenters, one of the area’s largest construction trades, continues to be roiled by turmoil after years of investigations into corruption and organized-crime influence and, since 2007, the federal convictions of four shop stewards for fraud, conspiracy or bribetaking.

The latest dispute has pitted many carpenters against the union leadership over a plan to withhold quarterly benefits checks from workers who refuse to grant the trustees of their welfare fund a new power to levy fines against them.

Leaders of the union, the District Council of Carpenters and Joiners, say the fines are necessary to deter carpenters from working off the books. Many carpenters say they are reluctant to give the union additional, and vaguely outlined, authority to fine workers.

The increasingly bitter dispute began last summer, after carpenters, joiners, timber workers and other union members were asked by the welfare fund trustees to sign a deduction-authorization card that would allow fund administrators to levy new but unspecified “fines or penalties” on workers’ accrued vacation pay.

The welfare fund provides life insurance, hospitalization, medical care, pension and vacation benefits to union members.

Vacation pay is contributed by employers. Workers pay taxes on the money, but they authorize the welfare fund to collect and to disburse it to them four times a year.

Union leaders tried to calm the waters in October with a letter explaining that the new fines or penalties were meant to deter “cash hounds” — members who illegally work for cash. Still, many members declined to sign the cards out of distrust of the trustees, a panel that includes employers’ representatives as well as the union’s top elected leadership, carpenters said.

“That card was a threat,” said a carpenter who agreed to be interviewed this month only on condition of anonymity because he said he feared retribution. “It was like signing a blank check to let them take out whatever they want, whenever they want.”

About 1,000 of the union’s 18,000 or so working members have not signed the card, a lawyer for the union said on Thursday. Many others signed it reluctantly, several union members said, because they needed the thousands of dollars that accrue each quarter.

“The average guy in this business has a family; he counts on the income from that vacation fund,” said Michael Power, 37, a carpenter and 19-year union member who has refused to sign. “I talked to a lot of guys who said they feel cornered. They didn’t want to sign the card, but they felt like they had no choice.”

The dispute escalated in March, when the union’s welfare fund trustees voted to stop sending vacation-pay disbursements to anyone who had not signed the authorization card, infuriating rank-and-file members.

The legal basis for withholding vacation-fund payments is unclear. The fund’s trustees, comprising five union officials and five employer representatives, voted to stop distributing vacation checks without seeking the consent of the fund’s lawyers, said Stuart GraBois, the welfare fund’s executive director.

Gary Rothman, a lawyer for the carpenters’ union, said, “Trustees have the authority to make reasonable rules as to the distribution of those benefits.” But Mr. Rothman added that since they voted to withhold the checks, the trustees have asked for a legal opinion, to be given at the next trustees’ meeting, on May 14.

Many union members say they have good cause to resist their leaders. Since October 2007, four union officials have been convicted of either taking illegal payments from union employers or cheating their own union’s benefit funds. The carpenters’ union has operated under federal court supervision since 1994.

Herman Benson, the founder of the Association for Union Democracy, a nonpartisan advocacy group based in Brooklyn, said the union leadership’s idea to withhold vacation pay was troubling.

“There’s something particularly outrageous about it, because the money that they’re withholding is not theirs; it’s the workers’,” Mr. Benson said.

See below for more...

Carpenter Outrage Over Blue Card Signing

Douglas J.McCarron
Carpenters National Headquarters
101 Constitution Avenue NW
Washington, DC 20001


Dear Douglas J. McCarron,

I’m writing you today to report unfair labor practices by the NYCDCC and its fund manager. The NYCDCC is withholding monies that belongs to the rank and file members who refuse to sign their blue card (a card that lacks transparency) and agreeing to assessments/or fines or penalties as designated, or as hereafter designated by the NYCDCC and their Local Unions.

The NYCDCC grossly violated their fiduciary responsibilities toward its members when they resulted to extortion to get us to accept an unpopular policy that they imposed on us from their board of trustees. Also our title I (Landrum – Griffin Act) rights may have been violated as well.

This is why a dictatorship within our Union does not work for the Carpenters best interest. It doesn’t work for our own federal government (we have the Executive, the Legislative and the Judicial) and it doesn’t work for our Union as well. Our forefathers set up the way that we are governed to keep our government honest; therefore they created a system of checks and balances. Our leadership is not greater than that of our country, therefore the NYCDCC should not be allowed to rule with an iron fist to impose policy on its membership without first giving us the opportunity to accept or reject whatever they are purposing.

We the rank and file members of the NYCDCC have a right to a democratic union and a right to have a leadership to work for our best interest according to the Union bill of rights under title I of the LMRDA. I purpose, that a letter be sent to every member of the NYCDCC in good standing, to inform them of a secret ballot vote to see if they want the right to vote on rates of dues, fees and assessments, as well as the right to accept or reject collective bargaining agreements that are negotiated by the board of trustees. Mr. McCarron, our trustees simply cannot be allowed to impose policy on its membership without conferring with its membership for approval. This fiduciary malfeasance has got to stop now.

Peter J. McGuire, a man whom the UBC models itself after, sums it up best when he said: “We organize to assist each other to secure employment for mutual aid in case of sickness or disability, to protect each other’s rights and redress our wrongs, to obtain adequate legislation that will secure our wages from the unscrupulous sharks that infest our trade…”

We the rank and file members of the NYCDCC are not mindless drones Mr. President, we want a voice in our union and a change in the way we are governed; I’m sure a man of your position will champion our cause and right our wrongs. Please Google and monitor this online petition: “Carpenters unite against unfair labor practices by the NYCDCC.”

This ongoing petition represents the rank and file members who want change in the way that we are governed, and a true democratic union amongst other things. Thank you in advance for your consideration and what I hope to be a satisfactory support in rectifying this matter.


Respectfully,

Sheldon Johnson


CC:
NLRB
OLMS
United States Department of Justice
New York State Attorney General
New York City District Attorney Office
U.S. Senate Committee on Health, Education, Labor & Pensions
Rep. Jerrold Nadler
Assembly member, Deborah J. Glick
Assembly member, Richard N. Gottfried
Mayor Michael R. Bloomberg
Governor David A. Paterson
Rank & File Members of the NYCDCC
Various Media Outlets
Board of trustees of the NYCDCC

Construction Unions Agree To Cut Labor Costs

By Theresa Agovino

After six months of discussions, building contractors and unions have reached an agreement to slice labor costs. The problem is that developers estimate the deal will only save them no more than 15%—far less than the 25% they had sought when negotiations began.

Developers had hoped lower labor costs would help bring down a project’s total price tag, making financing easier to achieve amid the credit crunch and recession. Labor accounts for 45% to 60% of a project’s costs. But there are doubts about whether the negotiated cuts go deep enough to make a difference in getting new or stalled projects off the ground.

“It doesn’t seem to go far enough to deal with the problems of today,” says Steven Spinola, president of the Real Estate Board of New York.

The contractors and unions are expected to present a deal that they say will lower costs between 15% and 20%. Developers, however, estimate the savings will only total between 8% and 15%.

“You don’t know how big the savings will be until you bid out the contract,” says Mr. Spinola.

The vast majority of the savings stem from efficiencies from work rule changes, sources say. Unions have agreed to work an eight instead of a seven hour day. They have also agreed to honor a common list of holidays. However, sources said there are few if any wage or benefit concessions.

Many unions were unwilling to take pay or benefit cuts because their members are still working even though construction activity has slowed as projects are completed and there is a dearth of new ones to replace them. Some wondered why unions weren’t more flexible in the face of a dim employment outlook and a real threat from nonunion labor.

For example, the New York Building Congress, a trade group, reported that residential building permits in the first two months of the year reached 576 units in 133 buildings citywide. That is just 20% of the total reached in the same period in 2008 when permits were issued for 2,878 units in 344 buildings. Those figures represent just 13% of the total during the same time frame of 2007, when permits were issued for 4,476 units in 621 buildings throughout the five boroughs.

However, corralling the unions is difficult. The deal covers 25 different unions with 72 different labor agreements. Few of the union leaders were willing to step up and cut their members’ pay without real assurances their sacrifices would lead to more jobs, sources said.

Developers were also disappointed that the agreement won’t be automatically applied across the board. Sources say that instead developers will have to apply to have their project covered by the new work rules. One source says the owners of 14 developments have made applications and that requests will be granted depending on whether the unions believe their concessions will really benefit the project.

The timing of the announcement by the contractors and the unions is still being worked out. Local union officials had traveled to Washington D.C. in recent weeks to have their national organizations sign off on the deal but it is unclear if it has the official okay. Additionally, unions, contractors and developers would like Mayor Michael Bloomberg to attend the press conference they are planning to announce the deal. That means waiting for the Mayor to fit the event into his schedule.

A spokesman for the mayor had no immediate comment. Louis Coletti, president of the Building Trades Employers’ Association didn’t return a call and a spokesman for Gary La Barbera, president of the Building and Construction Trades Council of Greater New York, an alliance of union, declined comment.

In the past, Mr. Coletti has said there are roughly $4 billion to $5 billion worth of construction projects that have been stalled or haven’t started in recent months because of difficulties in obtaining financing. He has said that union concessions could help spur at least some of them forward.

However, building costs are falling even without labor concessions. Construction costs across the city have fallen anywhere from 5% to 15% since just last summer as prices for everything from structural steel to plumbing subcontractors sag along with demand.

Construction Industry Partnership Addresses Threats to Union Construction

Union World Edition: Mar 2009

Developers, owners, labor and management attending the Construction Industry Partnership Conference held in Hollywood, Florida, February 9th & 10th participate in the panel, “What will unionized construction in NYC look like in 2009?.” Moderating the discussion is NYS Building and Construction Trades Council, AFL-CIO President Ed Malloy. Participating in the panel is Local 3 Business Manager Christopher Erikson (4th from right).

At a contentious meeting of the Construction Industry Partnership (CIP) held February 9th & 10th, parties from labor, management and developers openly discussed a plan to combat the threats to unionized construction in New York City.

The event opened discussions regarding the effect the economic downturn has had on the construction industry in New York City and the projects that are threatened. Among the keynote speakers was Larry Silverstein, developer of Ground Zero. He outlined the difficulties being confronted by developers and the need to work together to overcome the economics of development so that construction can continue at Ground Zero and other areas throughout New York.

According to Silverstein, 10,000 construction jobs are in jeopardy at Ground Zero alone. At 7 World Trade Center, 3,000 workers were involved in its construction. “It was the last to fall and the first to be rebuilt,” boasted Silverstein, “however, we need to insure that all of Ground Zero is rebuilt in a timely fashion. It is projected 60,000 families live in downtown Manhattan. The area needs new office space for when the economy rebounds.”

Silverstein estimates that Tower 2 will consist of 3.1 million square feet of space and that Tower 3 at an estimated 1,100 feet tall will consist of 2.9 million square feet and Tower 4 at 975 feet will consist of 2.5 million square feet. “Each will connect with the Fulton Street Transportation Hub,” stated Silverstein.

The construction of Towers 2, 3, and 4 remain at risk according to Silverstein. Funding is drying up due to the economic downturn and slow progress on the public infrastructure is causing cost increases. “Billions needs to be borrowed in order to build; banks are not financing WTC projects. Projected rents are down 30 to 40% which cause banks to reevaluate the terms of their loans to developers,” stated Silverstein.

“We need to reestablish the bottom line on labor costs for banks to be willing to lend. Failure to produce a cost structure will result in not being able to build these jobs. I have been a union builder my entire life,” declared Silverstein. “Presently, Towers 2 & 3 are stopped and Tower 4 is about to stop. We need to work together to obtain whatever cost savings are necessary in order for the financing numbers to work so that the banks will lend to developers in NY.”

NY & NJ Port Authority Executive Director Chris Ward addressed the conference and reiterated many of the concerns ­expressed by Larry Silverstein. He also ­committed the PA to utilizing Building and Construction Trades affiliated workers on all PA work.

Developer Albert Kalimian expressed his need for $120 million in savings to complete the interior of his project at the former Red Cross Building on Amsterdam Avenue with union workers. The veiled threat to go non-union was met with much opposition by participants of the Conference. Many union officials objected to such veiled threats to go non-union as anti-productive at developing the necessary cooperation to combat the effects of the economic downturn.

Panel

One panel entitled, “What will unionized construction in NYC look like in 2009?” brought many of the issues confronting the industry to the front. The panel was moderated by Ed Malloy, president of the NYS Building and Construction Trades and included Local 3 Business Manager Christopher Erikson, ­Executive Director of the General Contractors Association Denise Richardson, Executive Director of the District Council of ­Carpenters Mike Forde, Building Contractors Association President Steve Alessio, Plumbers Local 1 Business Manager George Riley and General ­Counsel Building Contractors Association of NY Ray McGuire.

Local 3 Business Manager Christopher Erikson (center) along with Executive Director of the District Council of Carpenters Mike Forde (left) and Steve Allessio, President of the Building Contractors Association, participating in the panel “What will unionized construction in NYC look like in 2009?”

The panel at times had heated discussions regarding the present circumstances the building trades are confronting regarding the demands of employers and developers for a 25% cost reduction.

Denise Richardson reported that the general contractors she represents are presently busy but that work is scheduled to finish within a year and that projected work has dropped off significantly. She pointed out that out of the Federal stimulus package, only $3 billion is going to New York State with less than $1 billion to New York City. Eighty percent of her members’ work is government funded and that it is questionable, with the loss of tax revenue, if infrastructure work presently projected will go forward.

Business Manager Erikson pointed out to those in attendance that unlike many of those present who have not experienced unemployment recently, Local 3’s members have not experienced full employment since the terrorist attack on the World Trade Center. “We have a furlough program that shares the work opportunity among our membership. Our members are more productive than at any time in our history. He reminded everyone that the union cannot create the work yet we are being asked to do just that today by imposing upon ourselves up to 25% reductions in our costs. Perhaps rather than an across the board PLA, we need to pick one project and develop a PLA that will make it a success and then use that as a prototype for ensuring the success of other projects.

Steve Alessio stated that unless he sees a change he will not be present next year. “I will no longer walk away from the $100 million of work that was lost to non-union in 2008. I will use open shop if I must to stay in business.”

George Riley of the Plumbers Local 1 was optimistic, stating “that by working together we can and will meet the challenge. We can’t just agree to wage cuts and other adjustments. The Union movement is a democratic movement which requires the assent and cooperation of our members. Change takes time. We are all willing to embrace new construction techniques, technology and increased organizing activities to confront the present threat.”

Ray McGuire of BCA, unlike Riley, was pessimistic citing historical trends that indicate trade unions in decline. In response, Local 3 Business Manager Erikson stated over the last eight years his members have worked over 20 million man-hours annually and he finds it difficult to believe that there is an additional 20 million-man hours annually being performed non-union.

Developer Larry Silverstein addressed the participants of the CIP Conference.

Commitment to PLA

On the second day of the Conference the leadership of labor, management and developers announced they are committed to working together to confront the challenges expressed during the previous day. The tone changed markedly to one of mutual cooperation to overcome the present obstacles.

Announced by all was the intent to select six (6) projects presently threatened, to go forward and develop a project labor agreement that would hopefully become a prototype for a city-wide PLA for threatened projects.

Gary LaBarbara, president of the New York City Building and Construction Trades Council (BCTC) and Lou Colletti, executive director of the Building Trades Employers Association (BTEA) committed their organizations to work in cooperation in ­developing the project labor agreement.

Denis Hughes, president of the New York State AFL-CIO outlined the situation in his address. “We are in difficult economic times. We must make meaningful accommodations to succeed. I would suggest the industry identify 4 to 6 projects where financing is threatened, where a PLA could be agreed to by the end of February 2009 and become the prototype for future projects in need of help.

In addition the BCTC and BTEA must commit to one another their intention to work together and eliminate any lack of trust that may exist that one is not as committed as the other.
We should adopt a code of excellence that will build confidence among the developers, lenders and customers in their usage of BCTC and BTEA members.

We must insure that non-productive work practices will not be tolerated. Non-productive workers will be pressured by their peers and urged to be productive.”

Lou Colletti stated that “survival is what is at stake. Our world is collapsing; we have no new work! If we have no work there is no work for our Union partners to work on. We must take drastic action in order to survive. The demands being made for cost reduction is not coming from the employers of union labor but from the banks. As Larry Silverstein stated, banks are not lending monies to developers/builders. Equity in property is less than the financing needs on new projects and banks are looking to take back funding on existing projects due to re-evaluation of the original financing commitments. Labor equals 50% of total cost of construction and some relief must come from that sector of the industry.”

Local 3 Assistant Business Manager Raymond Melville poses a question to NY&NJ Port Authority Executive Director Chris Ward at the CIP Conference.

“There are no guarantees,” stated Colletti, “The contractors are not making the decisions, the banks are. In response to the concern that only union labor is taking the brunt of the cost reduction it is important that everyone understand that contractors have laid off 10 to 15% of their project managers and support personnel. Profit margins have evaporated and no longer exist. Many projects are done at cost. Contractors have forgone salaries and those who remain employed have seen their wages frozen, salaries reduced and reduced contributions to 401(k) plans.

The problems being confronted are industry-wide and industry-wide solutions must be developed. The commitment to a PLA to address the needs of the industry is the first step in the right direction.”