Tag Archive for From Peace to Absurdity – The Emergence of Cost Thresholds and Multi-Project Coverage for Project Labor Agreements in California: Shifting the Purpose from Labor Peace to Cutting Merit Shop Competitio

Arguing Against a Project Labor Agreement Policy with a $500,000 Project Cost Threshold in the City of Martinez

Below is an email I sent today to the Martinez City Council and top staff regarding their vote tonight on instituting a Project Labor Agreement policy for all city projects over $500,000. Here is the staff report for the agenda item: Policy on Project Labor Agreements.


From: Kevin Dayton
Subject: Agenda Item #5: Project Labor Agreement Policy for “large, complex construction projects” costing $500,000 – warning about litigation
Date: November 19, 2014 at 9:35:40 AM PST

Dear Martinez City Council:

Tonight you will consider a Project Labor Agreement policy for “all City construction projects awarded by the City with a bid amount of more than $500,000 (the “Threshold”).”

According to the proposed resolution, this threshold will encompass “certain large, complex City construction projects involve numerous contractors and employees in different trades.” According to the proposed resolution, the purpose of this policy is the city’s recognition that “it is essential that construction on such projects proceed without the labor disruptions that can occur on projects both from external labor relations problems and from the frictions that often arise when a large number of contractors and their employees work in proximity to one another on a job site.” The resolution also adds that “in the private sector, project labor agreements have been used for years on large, complex construction projects” and “in the public sector, project labor agreements have been used successfully by the County of Contra Costa and other public entities in Contra Costa County for hospital, reservoir, wastewater, and other large, complex construction projects.”

You may be aware that this language has to be included in the resolution because that’s the basis in the National Labor Relations Act to justify a Project Labor Agreement. “Favoritism for contractors that are signatory to collective bargaining agreements in the construction trades” is not a legal purpose for a Project Labor Agreement, despite what anyone claims.

There’s a good chance you’ll be sued if you vote for this policy tonight. I recommend you delay a vote on the policy until you have a report prepared by an outside consultant clearly and thoroughly outlining the following:

1. What is a “large, complex construction project?”

2. What is a “large number of contractors and their employees?” Is it five employees or 736 employees? Is it five contractors or 23 contractors?

3. What is “proximity to each other?” Within spitting distance?

4. Speaking of spitting, what are some of the “frictions” that arise when people are working together to build a project, and what are the basic and immediate causes of those frictions?

5. When does the City of Martinez plan to build an airport, reservoir, or hospital for $500,000? (Note: this would be a valuable service for entities that are spending billions of dollars on similar large, complex construction projects.)

6. What are the recent or anticipated labor disruptions that this policy would prevent? Please indicate the controversies and the parties that caused the disruptions. (Note: this would be a valuable service for union contractors unaware that their unions plan to disrupt upcoming work.) The list of upcoming labor disruptions should include any planned incidents of “the unions and their members, agents, representatives, and employees” endeavoring to “incite, encourage, condone, or participate in any strike, walkout, sit-down, stay-in, boycott, sympathy strike, picketing, hand-billing, work stoppage, work slowdown, or other labor disruption or unrest.”

7. Please provide examples of workers outside of a Master Labor Agreement or Project Labor Agreement who have recently disrupted projects.

8. Please provide examples of workers covered by a Project Labor Agreement who have recently disrupted projects, and describe how those disruptions were resolved.

Here is a link to a report entitled From Peace to Absurdity – The Emergence of Cost Thresholds and Multi-Project Coverage for Project Labor Agreements in California: Shifting the Purpose from Labor Peace to Cutting Merit Shop Competition. I can email this to you directly as a PDF attachment if you want it in that format.

Please regard this email as Exhibit One and the report linked above as Exhibit Two for any future litigation.

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC
(916) 439-2159

From Peace to Absurdity – The Emergence of Cost Thresholds and Multi-Project Coverage for Project Labor Agreements in California: Shifting the Purpose from Labor Peace to Cutting Competition

The California Construction Compliance Group has published From Peace to Absurdity – The Emergence of Cost Thresholds and Multi-Project Coverage for Project Labor Agreements in California: Shifting the Purpose from Labor Peace to Cutting Merit Shop Competition. This is the first study ever published about project cost thresholds for Project Labor Agreements.

From Peace to Absurdity – The Emergence of Cost Thresholds and Multi-Project Coverage for Project Labor Agreements in California: Shifting the Purpose from Labor Peace to Cutting Merit Shop Competition

From the 1930s to the 1980s, a few federal government agencies and large private corporations used Project Labor Agreements (authorized under the National Labor Relations Act) to prevent labor disputes from delaying a small number of huge multi-year, multi-trade construction projects. The National Labor Relations Act implicitly and then explicitly authorized Project Labor Agreements in the context of a law meant to prevent commercial disruption resulting from labor disputes, which were routine in the mid-1930s and during the following four decades.

From the 1930s until the 1970s, trade unions dominated the construction workforce for major projects in the United States and in California. A fundamental change in the construction industry occurred in the early 1970s, when the percentage of the American and California construction workforce that belonged to a union began to decline precipitously. By 2012, the unionized percentage of the construction workforce had dropped to 13.2% in the United States and 15.9% in California. As unionization declined in construction, so did labor unrest.

Nevertheless, the number of government-mandated project labor agreements in California has skyrocketed in the past 20 years, as courts have upheld the right of California governments to require contractors to sign such agreements. A 1999 California Supreme Court decision allowing the San Francisco Airport Commission to mandate a Project Labor Agreement was the moment at which California’s construction trade unions severed Project Labor Agreements from their original intention to preserve labor peace within the context of the National Labor Relations Act.

Local governments began requiring their contractors to sign a Project Labor Agreement with unions simply because a contract was funded in part by bond sales authorized by one specific ballot measure. School boards imposed Project Labor Agreements on multi-project programs for which specific projects were not even identified. Most significantly, Project Labor Agreements – once reserved for the very largest projects – were now negotiated and approved to cover very small contracts such as bathroom renovations and bird, weed, and dust control.

Instead of being a construction management tool, Project Labor Agreements are now a political tool to protect market share for construction unions and their unionized employers from the competitive efficiency and productivity of merit shop contractors.

Government-mandated Project Labor Agreements applied to $20,000 bathroom renovations for compliance with the Americans with Disabilities Act are absurd. As the Sonoma County Board of Supervisors recognized at its September 18, 2012 meeting to discuss a Project Labor Agreement policy, a $25 million project cost threshold may serve as a reasonable level to consider a government-mandated Project Labor Agreements.