Tuesday, August 9, 2011

Judge OKs project labor agreements

In a win for unions, union contractors and the city, a federal judge finds nothing illegal about special deals made to reduce the cost of public projects.

By Daniel Massey

A federal judge late last week blessed agreements between the city and building-trade unions that were designed to save $300 million on public construction projects over four years.

Judge Robert Patterson Jr.'s Aug. 4 decision came in response to a suit filed by the Building Industry Electrical Contractors Association and the United Electrical Contractors Association, which had alleged that the project labor agreements violate the National Labor Relations Act.

The plaintiffs argued that the agreements “constitute an impermissible attempt to regulate labor relations in the construction industry” and also violate state competitive bidding statutes.

The agreements, reached in 2009, covered $6 billion in infrastructure projects through 2014, including the construction of a new police academy and an expanded 911 call center, and involving 32,000 construction jobs. The savings were to be achieved through more efficient work rules, standardized holidays and no-strike pledges. The agreements—comprehensive pre-hire collective bargaining agreements laying out the basic employment conditions for everyone involved in a project—were expected to create 1,800 additional construction jobs.

“This important ruling will allow critical public works—such as the new police academy—to proceed without interruption and ensure that future construction projects will be completed in a cost-effective and efficient manner,” said Jonathan Becker, deputy chief of the city Law Department's commercial and real estate litigation division.

The plaintiffs argued that the project labor agreements would reduce competition and increase construction costs. They alleged the city was acting as a regulator and not a market participant, and that the agreements made it impossible for unions who were not signatories to them to compete for work.

Neither the Building Industry Electrical Contractors Association nor the United Electrical Contractors Association is a member of the Building Trades Employers' Association, a group of 28 union contractor associations.

But Judge Patterson decided otherwise, ruling the city's conduct in agreeing to the agreements was akin to what private entities are permitted to do, and therefore was not unlawful regulation. Mr. Patterson relied in part on the U.S. Supreme Court's 1993 decision regarding the cleanup of Boston Harbor, which found that project labor agreements designed to speed up the project were lawful. He also dismissed the state competitive bidding claims, citing jurisdictional constraints. Courts in New York have consistently upheld the use of the agreements.

“This ruling validates what we've known all along: PLAs are legal and are very effective in lowering costs for taxpayers and improving efficiency on construction projects,” said Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, an umbrella group that represents 100,000 unionized construction workers in the city.

Alan Pollack, the plaintiff’s attorney, said he was “disappointed” in the decision and intended to appeal.

“Boston Harbor creates a large, but not impossible hurdle to overcome,” he said. “We believe that in our case, we met our burden of showing that the city was acting in its regulatory, not proprietary capacity.”

The suit is one of a growing number of challenges around the country to project labor agreements. Used on federal works projects since the 1930s, the agreements typically include no-strike, no-lockout clauses and force contractors to make exact bids, without stipulations for overruns. Union and nonunion bidders can compete for jobs under a project labor agreement, though most workers have to be hired through a union hiring hall.

Correction: Judge Robert Patterson Jr.'s ruling in favor of project labor agreements was handed down Aug. 4. The date was misstated in an earlier version of this article, published Aug. 9, 2011.


  1. TED


    U.S. Supreme Court

    BUILDING & C. TRADES COUNC. v. ASSOC. BLDRS., 507 U.S. 218 (1993)
    507 U.S. 218
    No. 91-261

    Argued December 9, 1992
    Decided March 8, 1993 *

    [ Footnote * ] Together with No. 91-274, Massachusetts Water Resources Authority et al. v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc., et al., also on certiorari to the same court.

    Following a lawsuit over its failure to prevent the pollution of Boston Harbor, petitioner Massachusetts Water Resources Authority (MWRA) - the state agency that provides, inter alia, sewage services for eastern Massachusetts - was ordered to clean up the harbor. Under state law, MWRA provides the funds for construction, owns the sewage treatment facilities to be built, establishes all bid conditions, decides all contract awards, pays the contractors, and generally supervises the project.

    August 9, 2011 8:52 PM

  2. - CONT -

    Petitioner Kaiser Engineers, Inc., the project manager selected by MWRA, negotiated an agreement with petitioner Building and Construction Trades Council and affiliated organizations (BCTC) that would assure labor stability over the life of the project, and MWRA directed in Specification 13.1 of its solicitation for project bids that each successful bidder must agree to abide by the labor agreement's terms.

    Respondent organization, which represents nonunion construction industry employers, filed suit against petitioners, seeking, among other things, to enjoin enforcement of Bid Specification 13.1 on the grounds that it is preempted under the National Labor Relations Act (NLRA).

    The District Court denied the organization's motion for preliminary injunction, but the Court of Appeals reversed, holding that MWRA's intrusion into the bargaining process was pervasive, and not the sort of peripheral regulation that would be permissible under San Diego Building Trades Council v. Garmon, 359 U.S. 236 , and that Bid Specification 13.1 was preempted under Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132 because MWRA was regulating activities that Congress intended to be unrestricted by governmental power.


    The NLRA does not preempt enforcement by a state authority, acting as the owner of a construction project, of an otherwise lawful [507 U.S. 218, 219] prehire collective bargaining agreement negotiated by private parties.

    This Court has articulated two distinct NLRA preemption principles: "Garmon preemption" forbids state and local regulation of activities that are protected by 7 of the NLRA or constitute an unfair labor practice under 8, while "Machinists preemption" prohibits state and municipal regulation of areas that have been left to be controlled by the free play of economic forces. These preemption doctrines apply only to state labor regulation, see, e.g., Machinists, 427 U.S., at 144 .

    A State may act without offending them when it acts as a proprietor and its acts therefore are not tantamount to regulation or policymaking. Permitting States to participate freely in the marketplace is not only consistent with NLRA preemption principles generally, but also, in this case, promotes the legislative goals that animated the passage of the NLRA's 8(e) and (f) exceptions regarding prehire agreements in the construction industry.

    It is undisputed that the Agreement between Kaiser and BCTC is a valid labor contract under 8(e) and (f). In enacting the exceptions, Congress intended to accommodate conditions specific to the construction industry, and there is no reason to expect the industry's defining features to depend upon the public or private nature of the entity purchasing contracting services.

    Absent any express or implied indication by Congress that a State may not manage its own property when pursuing a purely proprietary interest such as MWRA's interest here, and where analogous private conduct would be permitted, this Court will not infer such a restriction. Pp. 224-233.

    935 F.2d 345, reversed and remanded.

    BLACKMUN, J., delivered the opinion for a unanimous Court.

    settled law at this point

  3. http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=507&invol=218

    full case, for those so inclined

    507 US 218 (1993)

  4. Bldg & Cons Trades Council v. ABC
    507 US 218(1993)

    excerpt @ II

    A second preemption principle, "Machinists preemption," see Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S., at 147 , prohibits state and municipal regulation of areas that have been left "`to be controlled by the free play of economic forces.'" Id., at 140, (citation omitted). See also Golden State Transit Corp. v. Los [507 U.S. 218, 226] Angeles, 475 U.S. 608, 614 (1986) (Golden State I); Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 111 (1989) (Golden State II). Machinists preemption preserves Congress' "intentional balance `"between the uncontrolled power of management and labor to further their respective interests."'" Golden State I, 475 U.S., at 614 (citations omitted).


    In Machinists, we held that the Wisconsin Employment Relations Commission could not designate as an unfair labor practice under state law a concerted refusal by a union and its members to work overtime, because Congress did not mean such self-help activity to be regulable by the States. 427 U.S., at 148 -150. We said that it would frustrate Congress' intent to "sanction state regulation of such economic pressure deemed by the federal Act `desirabl[y] . . . left for the free play of contending economic forces. . . ." Id., at 150 (citation omitted). In Golden State I, we applied the Machinists doctrine to hold that the city of Los Angeles was preempted from conditioning renewal of a taxicab operating license upon the settlement of a labor dispute. 475 U.S., at 618 . We reiterated the principle that a "local government . . . lacks the authority to" `"introduce some standard of properly `balanced' bargaining power" . . . or to define "what economic sanctions might be permitted negotiating parties in an `ideal' or `balanced' state of collective bargaining."'" Id., at 619 (quoting Machinists, 427 U.S., at 149 -150) (internal citation omitted).

  5. .I have noticeable experience working as an electrician in power plant being responsible for power supply and power cables connections Electrical Contractors


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