Taking a Vote on Union Construction

By Steven Greenhouse

SAN DIEGO — California’s go-go construction industry came crashing to earth when the housing bubble burst. Ever since, union leaders and nonunion contractors have fought hammer and tongs for a bigger share of the shrunken business, much of which is public sector construction.

Labor unions have used their clout to persuade many city councils, county boards and school districts to adopt policies that favor unionized contractors and workers for building projects like schools and prisons.

Fuming at the favoritism, nonunion contractors have begun turning to the ballot box, asking voters to prohibit cities and counties from adopting such a pro-union tilt.

Southern California has become the focal point of this anti-union sentiment. In June, after an expensive propaganda war pitting business against labor, voters in Oceanside and Chula Vista approved measures barring city officials from adopting pro-union construction policies.

And next month, residents of San Diego County, which includes the two cities, will vote on a similar ban against favoring unions in county construction contracts, which total about $100 million a year.

“Certain elected officials have an almost canine affection for anything that unions demand of them,” said Eric Christen, director of the Coalition for Fair Employment in Construction, a business-backed group promoting the county ban. “This isn’t a union or nonunion issue. This is a fairness or discrimination issue. This is a fiscally sane versus fiscally insane issue.”

If the county ballot initiative passes, nonunion contractors plan to push for similar bans across the state, and eventually the nation, said Scott Crosby, president of the San Diego chapter of Associated Builders and Contractors, a group of nonunion builders.

“We have a 50-state strategy,” Mr. Crosby said. “This is overwhelmingly a fight for market share.”
The battle is focused on what are called project labor agreements, union-friendly pacts that are often used to smooth labor relations on large construction projects.

Under these agreements, the project owner — sometimes a private corporation, sometimes a government body — negotiates with unions before any contracts are bid to set rules on benefits, hours, holidays and other matters.

The agreements also require that winning contractors, whether union or nonunion, use only workers hired through union hiring halls. That allows nonunion workers to be hired, but requires all workers to join the union during the project. In exchange, construction unions promise not to strike or otherwise disrupt work.

Labor leaders, and some project owners, assert that the agreements help ensure that projects are completed on schedule and on budget. Such agreements were used to build Disney World and the Trans-Alaska Pipeline. Toyota Motor used one for its new Tacoma compact pickup plant in San Antonio.

“We’ve had P.L.A.’s on all of our projects, dating back to construction of the Kentucky plant in the mid-1980s,” said Mike Goss, a spokesman for Toyota North America. “It’s been a great experience on every project. All projects have come in on budget and on time.”

But opponents say the agreements inexcusably discriminate against nonunion contractors and workers while increasing construction costs.

The use of project labor agreements on government projects has waxed and waned for decades, depending on who was in power. For example, Gov. Tim Pawlenty of Minnesota and former Gov. Mike Huckabee of Arkansas, both Republicans, prohibited the agreements on state projects, as did the Missouri and Utah legislatures. But New York Gov. David A. Paterson and Massachusetts Gov. Deval Patrick, both Democrats, have embraced them on some projects.

Soon after taking office, President Obama issued an order encouraging federal agencies to use the agreements on projects of more than $25 million. President George W. Bush had barred the government from using the agreements.

A.F.L.-C.I.O. officials estimate that construction projects worth $100 billion nationwide have adopted the agreements in the last two years.

Here in California, the fight over the agreements has become so heated in part because the volume of nonresidential construction in the state has fallen 33 percent from its peak in 2006, while 400,000 construction jobs have been lost.

Government budget crises have helped fuel the campaign against the agreements, with many critics saying they unnecessarily raise the cost of public projects. Many nonunion contractors in the San Diego area are particularly incensed because they helped win voter approval of a $2.1 billion school bond last year, only to see unions persuade the school board to vote 3 to 2 to embrace project labor agreements for all the construction.

Determined to strip public officials of such discretion, the nonunion contractors first appealed to voters in Chula Vista and Oceanside. Chula Vista voters approved a ban on the agreements, 56 percent to 44 percent, and in Oceanside, the margin was slightly thinner.

Last week, nonunion contractors sent San Diego County voters a flier saying, “It’s not fair to force someone to join a union just to work on a taxpayer-funded project.”

Unions say many of the contractors fighting the agreements are “low-road” employers who do not provide health benefits and do not provide workers’ compensation coverage, in violation of state law.

Union leaders also argue that the agreements are good for everyone concerned. “They’re good for the owner of a project and for taxpayers because they help make sure the work is on time and on budget,” said Tom Lemmon, director of the San Diego Building and Construction Trades Council, an umbrella group for 35,000 unionized workers. “And they’re good for the workers because they guarantee that everyone has health and pension coverage.”

For unions, the stakes are large. About 24 percent of California’s 543,000 construction workers belong to unions, but on projects using the agreements, 75 percent do.

Opponents of the agreements say they slow construction and inflate costs by requiring contractors to follow inefficient union work rules, such as having construction laborers carry electricians’ materials instead of letting the electricians carry their own materials.

Mr. Crosby, of the contractors’ group, said unions often bully project owners into using project labor agreements by harassing them with banners and giant inflatable rats at work sites or by filing suits accusing them of failing to prepare adequate environmental impact statements.

David G. Tuerck, executive director of the Beacon Hill Institute, a public policy research center at Suffolk University in Boston, said the agreements had one purpose: to discourage nonunion contractors from bidding on big construction projects. “That’s a problem because something like 85 percent of construction workers are nonunion,” he said.

He said taxpayers also suffered. Studying projects in Massachusetts, Connecticut and New York, he found that the agreements raised costs 12 to 20 percent.

Ken Kreischer, president of Western Water Contractors, a nonunion company in Santa Rosa, Calif., said that having to pay “double benefits” discouraged him from bidding on jobs with project labor agreements. He said he provided health and retirement plans for his core employees, but under an agreement, he would also have to pay into a union health and pension plan for them. That would raise his costs for those employees by $20 an hour, he said.

Although the agreements require that workers be hired through the union hiring hall, they often allow nonunion contractors to use six or eight of their core employees, although those employees must join the union and pay union dues during the project. Under federal and most state project labor agreements, union and nonunion contractors are generally required to pay workers the prevailing wage, usually just below the union rate.

Dale Belman, a professor of industrial relations at Michigan State University, said it made sense for states and cities to use project labor agreements because many corporations had embraced them. He has been a co-author of several studies concluding that the agreements do not raise construction costs or decrease the number of bidders.

One of his co-authors, Matthew Bodah, the chairman of the economics department at the University of Rhode Island, said: “Nonunion groups claim that these are just a political bone thrown to unions, but there has to be more to it than that. Why do so many well-known companies always build under P.L.A.’s?”