Oxnard Union HSD Project Labor Agreement Negotiating Terms: San Diego USD Versus Los Angeles USD
Dear Oxnard Union High School District Board Members, Administrators, and Appointed Citizen Leaders:
As indicated during the November 20, 2013 board meeting, a majority of trustees for the Oxnard Union High School District wants to emulate the San Diego Unified School District and the Los Angeles Unified School District when implementing a requirement for construction contractors to sign a Project Labor Agreement with unions as a condition of winning a contract for $40 million in upcoming construction.
You may not be aware that the Project Labor Agreements for San Diego Unified School District and Los Angeles Unified School District have some fundamental differences related to employer fringe benefit payments. San Diego USD provides some limited flexibility for non-union contractors, while Los Angeles USD is highly restrictive and makes no concessions to non-union construction benefit plans. Below are links to those PLAs and then some analysis of them.
By the way, you may need to check with the Tri-Counties Building and Construction Trades Council, AFL-CIO to confirm that the finalized proposed Project Labor Agreement for your school district needs to be approved by officials at the national headquarters of the Building and Construction Trades Department, AFL-CIO in Washington, D.C.
You’re welcome to contact me with any technical questions about Project Labor Agreements, although I am BIASED against such a costly and anti-competitive government regulatory mandate on bidders for taxpayer-funded contracts. (And really, you should be too.)
President and CEO
Labor Issues Solutions, LLC
P.S. – links to your district’s oversight committee documents get a screen that says “THIS IS SOMEWHAT EMBARRASSING, ISN’T IT? It seems we can’t find what you’re looking for. Perhaps searching can help.”
San Diego Unified School District Project Labor Agreement
At the San Diego Unified School District, the Project Labor Agreement (“Project Stabilization Agreement”) allows a construction contractor to pay employee fringe benefits into its own existing employee benefit plan, provided that the plan is determined to be equivalent to the union plans to which the contractor would otherwise send payments. A third-party Coordinator or Administrator determines whether or not the programs are equal or better than the union programs.
Here is the language from the San Diego USD Project Labor Agreement:
Section 5.2 Benefits. (a) Contractors shall pay contributions to the established employee benefit funds in the amounts designated in the appropriate Schedule A; and make all employee authorized deductions in the amounts designated in the appropriate Schedule A: provided, however, that the Contractor and Unions agree that only such bona fide employee benefits as accrue to the direct benefit of the employees (such as pension and annuity, health and welfare, vacation, apprenticeship, and training funds) shall be included in this requirement and required to be paid by the Contractor on the Project; and provided further, however, that such contributions shall not exceed the contribution amounts set forth in the applicable prevailing wage determination.
Unless otherwise required by law, Contractors who have fringe benefits for their core workforce equal to or better than those designated in the Schedule A do not have to pay the fringe benefit contribution designated in the Schedule A on the core work force and may utilize their own fringe benefits. The Project Labor Coordinator will be responsible for determining whether the benefits are equal to or better than those designated in the Schedule A’s. Contractors must submit their fringe benefit packages to the Project Labor Coordinator for evaluation prior to bidding. Contractors may only take credit against the prevailing wage in accordance with the Prevailing Wage Statute and the difference between the hourly cost, if any, of the fringe benefit provided and the hourly cost of the applicable fringe benefit portion of the wage determination must be paid to the worker as wages. Benefits designated in the Schedule A will be paid on all employees dispatched by the Union.
(b) Where applicable, the Contractor adopts and agrees to be bound by the written terms of the applicable, legally established, trust agreement(s) specifying the detailed basis on which payments are to be made into, and benefits paid out of, such trust funds for its employees. The Contractor authorizes the Parties to such trust funds to appoint trustees and successors’ trustees to administer the trust funds and hereby ratifies and accepts the trustees so appointed as if made by the Contractor.
(c) Each Contractor and Subcontractor is required to certify to the Project Labor Coordinator that it has paid all benefit contributions due and owing to the appropriate Trust(s) or fringe benefit programs prior to the receipt of its final payment and/or retention. Further, upon timely notification by a Union to the Project Labor Coordinator, the Project Labor Coordinator shall work with any Contractor or Subcontractor who is delinquent in payments to assure that proper benefit contributions are made, to the extent of requesting the District or the prime Contractor to withhold payments otherwise due such Contractor, until such contributions have been made or otherwise guaranteed.
These Project Labor Agreements also explicitly exempt non-union contractors from making employer payments classified as “Other” under California Labor Code §1773.1(a)(7-9) to labor-management committee trust funds or other similar funds.
Los Angeles Unified School District Project Labor Agreement
At the Los Angeles Unified School District, the Project Labor Agreement (“Project Stabilization Agreement”) requires a construction contractor to pay employee fringe benefits into union-affiliated trust funds, even if it has its own existing employee benefit plan that is equivalent to the union plan. When a contractor does not send the money to the union trust funds, the unions and their trust funds sue the school district and the contractor.
Here are some other problems with the Los Angeles USD Project Labor Agreement:
1. Non-Union Workers in Los Angeles County Under Project Labor Agreement Have Bank Accounts Opened for Them at IBEW Credit Union
Attached is the excerpt from the collective bargaining agreement for the IBEW Local No. 11 about workers’ pay deposited into an account set up for them at the IBEW Local No. 11 credit union, and the signature card for non-union electricians working under the PLA at Los Angeles USD authorizing deposit of pay there and withdrawals for dues payments. Here are links to the documentation: Master Labor Agreement Provisions for IBEW Credit Union; Forms to Open a Bank Account in Your Name at the IBEW Credit Union.
Why is this PLA requirement offensive? Workers should have the right to choose how they invest the money they earned. Requiring a percentage of workers’ paychecks to be deposited in a specific credit union takes away that right. The basis for a successful free market economy is the right of individuals to make their own economic choices. In addition, workers should not be forced to have their paychecks deposited in a specific bank – they may object to that bank because of how it invests its deposits or how it uses their personal information. Finally, forcing a percentage of workers’ paychecks to be deposited in a specific bank gives the bank a guaranteed inflow of money, thus taking away the bank’s incentive to provide the best products and services to attract potential depositors. In addition, this guaranteed inflow may encourage the bank to take excessive risks or make foolhardy investment decisions.
2. Union Forces Contractors to Pay Journeymen Wages and Benefits to Non-Union Apprentices under Project Labor Agreement in Los Angeles County
A non-union contractor signed a Project Labor Agreement that was part of the bid specifications for a project at the Los Angeles Unified School District (LAUSD). The contractor requested apprentices from the applicable International Brotherhood of Electrical Workers (IBEW) union program, but then requested apprentices from a non-union program after the IBEW program failed to dispatch apprentices. The non-union program provided 17 apprentices, who received the appropriate on-the-job training on the project. Subsequently, the IBEW and its related trust funds sued the contractor in federal court, contending that the contractor should have paid journeymen wages and benefits to the apprentices because they were not dispatched from the applicable union apprenticeship program as specified in the Project Labor Agreement.
On November 3, 2009, a district court judge ruled that the Project Labor Agreement required apprentices to come from union programs. The judge awarded the union $272,738.63 in underpaid trust contributions, including interest of $55,940.34, along with liquidated damages of $55,940.34 and additional auditor fees of $7,177.50.
Contractors working on public works projects in California must comply with Title 8, Section 230.1 http://www.dir.ca.gov/t8/230_1.html of the California Code of Regulations. That regulation states “If the apprenticeship committee from which apprentice dispatch(es) are requested does not dispatch apprentices as requested, the contractor must request apprentice dispatch(es) from another committee providing training in the applicable craft or trade in the geographic area of the site of the public work, and must request apprentice dispatch(es) from each such committee, either consecutively or simultaneously, until the contractor has requested apprentice dispatches from each such committee in the geographic area.” It seems that according to the IBEW, if a contractor working under a PLA does not get enough apprentices from the applicable union apprenticeship program and then complies with §230.1 by requesting and obtaining apprentices from an eligible non-union apprenticeship program,, then the contractor has to pay journeymen-level wages to those apprentices!
3. Unions in Los Angeles County Can Obtain the Personal Information of Workers and Audit the Books of Contractors Who Sign a Project Labor Agreement
A California appellate court issued a decision on August 16, 2010 of great interest to contractors signing a Project Labor Agreement in Los Angeles County.
Since 2007, the International Brotherhood of Electrical Workers (IBEW) pension program has filed at least eight lawsuits to obtain pension payments from employers who had signed the Project Labor Agreement to work at the Los Angeles Unified School District. When the pension program did not have employer contribution reports containing the personal information of the employees, it filed document subpoenas to obtain certified payroll records from LAUSD that exposed the names, addresses, and social security numbers of the employees. An IBEW pension program official stated to the court that this was easier than auditing the contractor as a way to get the personal information.
LAUSD wanted to clarify in the courts whether or not the language in California Labor Code Section 1776(e) [see below] provided a “conditional privilege” or an “absolute privilege” of confidentiality in certified payroll records. The appeals court ruled that LAUSD had to provide the personal information on the certified payroll records to the pension program. It did not address a lower court ruling that §1776(e) was preempted by ERISA.
****Of interest: footnote 3 on page 5 confirms that the Project Labor Agreement at LAUSD requires signatory contractors to submit to the written terms of the applicable trust agreement, which means that in this case the IBEW has authorization to audit the books of non-union contractors.****
One way or another, the IBEW can and will obtain the personal information of employees working for contractors that are signatory to the LAUSD PLA.
4. Unrelenting Harassment of the Non-Signatory Electrical Contractors in the Los Angeles Unified School District’s $11 Billion of Construction Work: Subscription Agreements
Diana Limon, a compliance officer in Local 11, one of 9 IBEW members who joined 126 fellow unionists at graduation ceremonies. AFL-CIO President John Sweeney and Dr. Susan Schurman, President of the College, awarded the degrees.
“I encouraged Diana to attend, and I wanted to be there with her,” states Brungard. “She’s exceptional. She was apprentice of the year and then served as a foreman for a local contractor. I know how hard she worked. I know that what she learned at the NLC will make her an even more impressive leader.”
Limon, a Labor Studies major, says: “The positive learning environment and the commitment of my classmates to take their knowledge back to their organizations was phenomenal.” All seniors must complete a research project dealing with an issue affecting their union or the labor movement-to earn a B.A. degree. Limon’s paper focused on the process of getting non-union electrical contractors to subscribe to benefit trust funds established as part of a $11 billion Project Stabilization Agreement between the Orange County Building Trades and the employer, the Los Angeles Unified School District. Limon was awarded a distinguished paper award, along with IBEW members Eugene Parrington and Francis J. Cunningham. They presented the papers in a symposium prior to graduation. Abstracts for each paper are available online here. The papers will be permanently shelved in the George Meany Center library.