.Richmond Sues Feds over Blow to Unionized Labor

Unions hailed project labor agreements, but smaller firms welcome the change

The small crowd that filled in half a ballroom at the not-quite-resort destination of the San Ramon Marriott was on the whole a relaxed, confident bunch. They sipped their decafs and dined on poached eggs and fruit slices as they listened with all-around good humor to a panel of speakers who spoke about the death of government contracts with unions. Since there were no labor representatives to be seen, the whole room could be described as genial, happy to receive the news that, thanks to one stroke of the pen from the new President, many of the comprehensive pacts between government and labor for large public works projects–called project labor agreements–have been declared illegal.

If you’ve been to the Hoover Dam or Disney World, you’ve visited two projects built under project labor agreements. A PLA is negotiated before a project goes out to bid, and it helps prevent any labor disputes that could cause costly delays. The agreements cover everything from benefits, to training, to how apprentices and workers are hired, and are mainly used on multi-year, multimillion dollar projects. Such large projects will often have a large mix of union and nonunion contractors, which means that at least one union contract will undoubtedly come up for renewal during the life of the project. Project developers use PLAs as a type of insurance, quelling the possibility of a labor dispute hitting at a sensitive time by agreeing beforehand on the working conditions. In exchange for a union promise to not strike during the length of the contract, the government usually agrees to hire all employees for the job through the union hiring hall. Plus all apprentices must come from the union’s apprenticeship training schools, and all workers, union or not, must pay into the union’s pension and benefits plan.

Project labor agreements have been around since the 1930s, when nearly every construction laborer was in a union, strikes could occur often, and general strikes–where other workers in unrelated fields walked out in sympathy, causing massive shutdowns in whole cities–were not unheard of. Although the number of unionized construction workers has plummeted, and now hovers in the twenty percent range, PLAs are still seen as a valuable tool by both public agencies and private companies. Locally, the list of public agencies using PLAs is long and includes the Port of Oakland, the San Francisco Airport, the Lawrence Livermore National Laboratory, and Contra Costa County.

But some argue allowing public agencies to use PLAs is unfair because it effectively limits contracts to union shops. To these critics, PLAs are just another example of unions throwing their weight around, bullying the government into capitulating to their demands by threatening strikes and pickets. “The provisions that are included in PLAs,” says Kevin Dayton of the Associated Builders and Contractors, an organization that represents mostly nonunion small contractors, “are there to discourage nonunion contractors from submitting bids.” The requirement that contractors pay into the union pension and benefit plan, for example, means that nonunion workers cannot reap the benefits unless they join the union. “Under PLAs, contractors have to obtain their workers from a union hiring hall,” Dayton says. “So, under a PLA, if a nonunion company decided to work on it, the workers might have to go to a union hiring hall and the company has to hope that the union hires [those specific workers]. And even if the worker is referred back to the company from the union, the company is going to be paying health and welfare benefits to the union. Unless the worker decides to stay with the union afterward, he won’t be vested, or get benefits.” In effect, he says, “what happens is that [nonunion] companies don’t bid.”

Dayton points to Contra Costa’s $11.5 million Family Law Center, recently put out to bid under a PLA. In January, when it was first put out to bid without a PLA, thirteen contractors, five of which were nonunion, indicated their interest. When the Board of Supervisors voted to require a PLA in March, the number of interested contractors dropped to five, and all were union. Plus, Dayton says, the costs go up under a PLA. “It’s no surprise, because it cuts the competition. When you have fewer bidders, you’re less likely to have a lower bid,” he says.

Critics also argue that PLAs help to exclude minority-owned businesses by driving up the costs and hassle of doing business with the government. “PLAs from our perspective have been very detrimental for us to do business,” says Beth Aaron of the Bay Area Black Contractors Association. “Proposition 209 [the measure banning affirmative action] had a definite impact on minority businesses. If you look at the city of Oakland, because of 209 we have dropped drastically. Well, you add a PLA to that and our numbers are almost down to nothing.” Minority-owned businesses are often the smaller, nonunionized firms that Dayton argues lose the most from PLAs.

But union leaders say the reality is just the opposite. Greg Feere, executive director of the Contra Costa Building and Construction Trades Council, says that his organization has negotiated over $7 billion in projects covered under PLAs. “We have never had a project that didn’t come in on schedule, on budget, and most importantly, done safely,” he says. As far as keeping out nonunion and minority contractors, Feere says he doesn’t believe it. He points to Contra Costa’s $80 million county hospital project as an example of a project built under a PLA with a nonunion contractor. “On a public works job, there is no restriction on contractors at all. They’re free to bid it, they’re free not to bid it,” Feere says. “We have a lot of women and minority contractors who are union. They’re small, they bid, and they get the work.”

Feere agrees that PLAs are a “great organizing tool” for the unions, and he believes that the real concern of contractors is their workers’ exposure to the union: once nonunion workers get a taste of union life, he says, they don’t want to go back. “They lose their workforce,” he says of nonunion contractors. “The real problem for the nonunion contractors is that when their nonunion workers go through the local hiring halls and get dispatched out to jobs, we have not had a case where those workers went back to their nonunion employers.”

Thanks to President George Bush, the arguments over PLAs may have become a moot point. In February, Bush signed an executive order overturning one that President Clinton had written early in his first term that encouraged governments to use PLAs as a cost-saving tool. Bush’s reversal banned PLAs on all projects using federal funds, putting several Bay Area public agencies in a panic. The Port of Oakland, for example, was in the midst of its ambitious Vision 2000 renovation project when Bush’s order came down. “If you had a project which needed a PLA in the first place, taking it off does nothing but cause difficulties,” says David Alexander, the port’s attorney. Perhaps Bush heard the cries from California and the East Coast, where several large PLA projects had already commenced, because two months later he issued a second executive order that softened the blow. He left it up to the various federal agencies in charge of the funding to determine whether projects that had already been awarded could go forward using PLAs. Alexander says that the port applied to the Department of Transportation, the funding agency for Vision 2000, for just such an exemption, and he has hopes that the request will be granted. But the port’s airport runway resurfacing project, which was about to go out to bid as a PLA project, must now be rebid without the PLA. “We were obligated to stop the bidding project, issue new specs with regard to that issue, and the bids all came in without a PLA,” Alexander says. “Now that project will go forward as a non-PLA.”

The port is not the only Bay Area agency left in the lurch. Contra Costa County had been planning to use PLAs as it constructs its new juvenile hall, its new county administration building, and a health center in Richmond; the city of Richmond was about to issue a PLA on its transit village near the Richmond BART station and its renovation of the historic Ford assembly plant.

Now prohibited from doing both, Richmond decided to sue the Bush administration. The city is joined in the suit by the Contra Costa Building and Construction Trades Council as well as national unions. Sandra Benson, one of the lawyers representing Richmond and the Contra Costa Building and Construction Trades Council, another party to the suit, says that Richmond did what no other city, even those positive to PLAs, would do. “We received a lot of statements [from other cities] saying we fully support this, but we fear retribution,” Benson says. “They were still waiting for federal funds to come in.” The lawsuit asks for a preliminary injunction against the Bush order, which means that enforcement of the order would be put on hold while the case plays itself out. Benson says the city expects to have their first hearing in September.

Until then, it looks like Richmond will have to issue their bids and commence construction without the benefit of a PLA. Richmond City Councilmember Tom Butt voted to support the lawsuit. “In my opinion, for large and complex jobs, you get a higher quality of construction from union contractors, and potential problems with projects are lessened with large union contractors than nonunion,” he says. Besides, he adds, “our city has had a beneficial relationship with local labor organizations for a long time. They’re very helpful in supporting a number of issues that I support, and I appreciate that and look for ways I can reciprocate when I can.”


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