Federal Judge Upholds Project Labor Agreements

A federal judge found nothing illegal about special deals made to reduce the cost of public projects. Ruling is a win for electrical unions, union contractors and the city.

The decision handed down by Judge Robert Patterson Jr. came in response to a lawsuit filed by the United Electrical Contractors Association and Building Industry Electrical Contractors Association, alleging that project labor agreements (PLAs) violate the National Labor Relations Act. Lawyers for the plaintiffs argued that the project labor agreements “constitute an impermissible attempt to regulate labor relations in the construction industry” and also violate New York State competitive bidding statutes.

The ruling sanctified agreements between the city and building trade unions, designed to save $300 million on public construction projects over four years. Attorneys for the plaintiffs were disappointed at the decision and intended to appeal.

The 2009 project labor agreements covered more than $6 billion in infrastructure projects through 2014, including the construction of a new police academy and an expanded 911 call-center - and roughly 32,000 construction jobs. Significant cost savings through more efficient work rules, standardized holidays and no-strike pledges were expected. 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.

The United Electrical Contractors Association argued that the PLAs 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 the agreements to compete for work.

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.

The Building and Construction Trades Council of Greater New York, an umbrella group that represents 100,000 unionized construction workers in the city, contended that the PLAs were both legal and very effective in lowering taxpayer costs, as well as improving efficiency on construction projects. 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.

The lawsuit is one of a growing number of challenges around the country aimed at project labor agreements. PLAs, which have been in use on federal works projects since the 1930s, typically include no-strike, no-lockout clauses and force contractors to make exact bids, without stipulations for overruns. While both union and nonunion contractors can compete for jobs under a project labor agreement, generally most workers have to be hired through a union hiring hall.

By Peter Coyne / TheElectricWeb.com
August 9, 2011