Thursday, June 2, 2011

Contractors escalate war with construction unions

Pulling out of a century-old pact, builders threaten to bring nonunion workers to major projects across the city. Unions call it a ploy.

As testy building trades contract talks near a June 30 deadline, contractors revealed Thursday that they will terminate their participation in a more than 100-year-old agreement that commits them to using only union labor on job sites.

In a letter sent last month to Building and Construction Trades Council President Gary LaBarbera, Building Trades Employers' Association President Louis Coletti wrote that his board of governors voted to terminate the New York Plan for the Resolution of Jurisdictional Disputes between the two groups.

“It's the first step to formally breaking the business model that has existed since 1903 where all contractors jobs are built with 100% building trades members,” Mr. Coletti said. “It's a historic vote that nobody in the BTEA ever wanted to make. We're doing it because we have to position ourselves to survive if we can't get our partners to make the changes to help us and to help them."

The New York Plan expires Dec. 31 but had been expected to roll over as it always had in the past. The contractors' move came six weeks before the June 30 expiration of nearly two dozen contracts that govern unionized construction in the city.

Mr. Coletti said the decision opens the door to open shops, where union and nonunion employees work side by side—unthinkable until now on major projects. “It's not something we want to see happen,” he said, but added that because union workers are performing work on nonunion jobs, it has placed his members at a competitive disadvantage.

The New York Plan provides mediation and arbitration services for resolving disputes between unions over jobs without interrupting work on projects. It requires contractors to be fully union and prohibits work stoppages owing to disputes between unions.

Paul Fernandes, Mr. LaBarbera's chief of staff, said the BTEA's decision to terminate its participation in the deal was a “negotiating ploy” that would have little impact because the New York Plan is embedded in individual collective bargaining agreements.

“I think some contractors are under the painfully mistaken impression that by taking this action they have relieved themselves of their contractual obligations,” he said. “That is simply not the case. This action by the BTEA in and of itself does nothing to alter those contractual relationships."

Mr. Fernandes added that the termination of the plan is a “drop-dead issue” for unions. “That's not something that would be on the table, from our perspective."

Hope Cohen, associate director of the Regional Plan Association's Center for Urban Innovation, said the employers' move and organized labor's response is a sign that both sides are on walking to the edge of the cliff as negotiations enter their final stages.

“We've been hearing for a long time that the two sides are quite angry at each other, but this is potentially the most serious standoff that we've heard about,” she said. “Maybe there is going to be a strike."

In a recent report on the construction industry, Ms. Cohen took aim at the New York Plan, charging that its resolution process has resulted in less productive work rules.

The report cites a dispute between carpenters and electricians over the installation of a light fixture at the Goldman Sachs headquarters in Battery Park City. An arbitration panel ruled that the electricians should drill the holes and the carpenters should install the fixture.

The contractors' decision comes as they are pushing for significant concessions from unions, arguing that the recession has permanently altered the finances of the $24 billion industry.

By Daniel Massey / Crain's New York Business
June 2, 2011 3:45 p.m.