At the link immediately below is a copy of the DRAFT Project Labor Agreement (aka Community Benefits Agreement) between the California High-Speed Rail Authority and the State Building and Construction Trades Council of California and the Signatory Craft Councils and Local Unions. It was Addendum 8, issued on December 26, 2012, for the Request for Proposal for Design-Build Services for the first construction segment between Madera and Fresno. Tutor Perini/Zachry/Parsons, a Joint Venture, won the contract.
At the link immediately below is the FINAL executed version of the Project Labor Agreement for California High-Speed Rail, signed by the CEO of the California High-Speed Rail Authority on August 13, 2013.
A draft Project Labor Agreement for the first segment of the California High-Speed Rail is now included as Addendum 8 in the Request for Proposal (RFP) to the five pre-qualified design-build consortiums. These entities have a January 18, 2013 deadline to bid on design and construction of the first 28-mile segment of the high-speed rail line in the San Joaquin Valley, from Madera through Fresno.
Consistent with the Community Benefits Agreement resolution approved at the December 6, 2012 meeting of the California High-Speed Rail Authority board of directors, the Project Labor Agreement is disguised under the term “Community Benefits Agreement.” But as you’ll see below, it’s the standard boilerplate language used in most Project Labor Agreements that contractors must sign with unions to work on government projects in California. And a close reading of the specific provisions in the agreement shows that the alleged benefits are nothing but efforts, goals, acknowledgement, an exercise of full support, and even one recognition of a desire!
And a close reading of the specific provisions in the agreement shows that the alleged benefits are nothing but efforts, goals, acknowledgement, an exercise of full support, and even one recognition of a desire!
Here’s a little more, buried deep in the bid documents:
Section 7.11.3 of the Request for Proposal for Design-Build Services for the first segment of the California High-Speed Rail project states that “Proposers are advised that, subject to FRA [Federal Railroad Administration] approval, the Authority intends to develop a Community Benefits Agreement consistent with the Community Benefits Policy adopted by the CHSRA [California High-Speed Rail Authority] Board at its December 6, 2012 meeting with which the Contractor will be required to comply.”
And Section 10.1 of the Request for Proposal states that “The Authority [that is, the California High-Speed Rail Authority CEO Jeff Morales] will not make a recommendation for award of the Contract [to the California High-Speed Rail Authority Board of Directors] unless the successful selected Proposer has submitted the following: Escrowed Proposal Documents and corrected any deficiencies identified by the examination of the EPDs, and A letter of assent executed by the Proposer agreeing to be bound by the Community Benefits Agreement.” This indicates a government-mandated Project Labor Agreement.
Obviously the California High-Speed Rail Authority‘s inclusion of this Project Labor Agreement as an addendum in the RFP is also a strong suggestion for pre-qualified design-build entities to commit to signing this agreement in order to fulfill the conditions of the Community Benefit Agreement resolution. A contractor who commits to sign the union agreement will likely receive the full amount of points assigned to this objective in the “best value” scoring criteria used by the California High-Speed Rail Authority as the basis to award the design-build contract.
This long-anticipated union agreement will be signed by Robbie Hunter, new President of the State Building and Construction Trades Council of California, by a representative of the California High-Speed Rail Authority, and by representatives of the design-build entity and its subcontractors.
The Project Labor Agreement’s Phony Community Benefits: Just Nice Words
Pages 3 and 4 of the draft Project Labor Agreement identifies certain kinds of special workers who will allegedly get the community benefits:
Section 1.15 states that a “National Targeted Worker” means (a) an individual whose primary place of residence is within an Economically Disadvantaged Area or an Extremely Economically Disadvantaged Area in the United States; or (b) a Disadvantaged Worker.
Section 1.9 states that an “Economically Disadvantaged Area” means a zip code that includes a census tract or portion thereof in which the median annual household income is less than $40,000 per year, as measured and reported by the U.S. Census Bureau in the 2010 U.S. Census and as updated by the parties upon the U.S. Census Bureau issuing updated Median Annual Household Income data by census tract in the American Community Survey.
For some reason, this definition does not limit the area to the San Joaquin Valley or even to California. And how many zip codes qualify?
Section 1.10 states that an “Extremely Economically Disadvantaged Area” means a zip code that includes a census tract or portion thereof in which the median annual household income is less than $32,000 per year, as measured and reported by the U.S. Census Bureau in the 2010 U.S. Census and as updated by the parties upon the U.S. Census Bureau issuing updated Median Annual Household Income data by census tract in the American Community Survey.
Once again, this definition does not limit the area to the San Joaquin Valley or even to California. And how many zip codes qualify?
Section 1.8 states that a “Disadvantaged Worker” means an individual who, prior to commencing work on the project, resides in an Economically Disadvantaged Area or Extremely Economically Disadvantaged Area as defined in Sections 1.9 and 1.10, and faces at least one of the following barriers to employment: (1) being homeless; (2) being a custodial single parent; (3) receiving public assistance; (4) lacking a GED or high school diploma; (5) having a criminal record or other involvement with the criminal justice system; (6) suffering from chronic unemployment; (7) emancipated from the foster care system; (8) being a veteran; or (9) being an apprentice with less than 15% of the apprenticeship hours required to graduate to journey level in a program as described in Section 1.2.
Keep in mind, this definition does not limit the area to the San Joaquin Valley or even to California.
Seven – and possibly eight, depending on the individual veteran – of the nine barriers to employment listed in the definition of “Disadvantaged Worker” are significant liabilities for getting into a state-approved apprenticeship program and more importantly, staying in it. But it’s easy to see that #9 is a loophole for how the contractors and unions could fulfill the goal for a “Disadvantaged Worker” – they’ll simply dispatch apprentices who are in their final 15% of the number of hours needed to qualify to graduate from their union apprenticeship program.
The language in the Project Labor Agreement associated with actually finding and employing National Targeted Workers is vague and sometimes unintentionally humorous in its exaggerated sincerity.
The language in the Project Labor Agreement associated with actually finding and employing National Targeted Workers is vague and sometimes unintentionally humorous in its exaggerated sincerity:
[Page 15] Section 7.1 The Unions will exert their best efforts to recruit and identify individuals, particularly National Targeted Workers, as well as those referred by the Jobs Coordinator, for entrance or reentrance into the labor/management apprenticeship programs, and to assist individuals in qualifying and becoming eligible for such programs.
[Page 17] Section 7.3.1 The C/S/Es [that is, the contractors, not the unions] must document all efforts made to comply with the targeted hiring process to locate and hire National Targeted Workers.
Note that the unions give the responsibility for documenting recruitment and hiring to the contractor, even though it’s the unions that run the hiring halls and dispatch the workers.
[Page 17] Section 7.4 Unions will make their best effort to recruit sufficient numbers of skilled craft persons to fulfill the requirements of the Contractors/Employers.
[Page 17] Section 7.5.1 The Unions will make every effort to recruit National Targeted Workers and to refer and utilize National Targeted Workers on the Project.
This provision also contains a subtle but useful conditional loophole: “National Targeted Workers” will be recruited, referred, and used “as long as they possess the requisite skills and qualifications…” How many National Targeted Workers (such as homeless people) can be reasonably expected to possess these skills and qualifications?
[Page 18] Section 7.5.3 (A) All Contractors/Employers performing Project Work will every effort [sic] to employ the maximum number of Apprentices allowed by State Law.
[Page 19] Section 7.8.1 The C/S/Es and Unions recognize a desire to facilitate the entry into the building and construction trades of veterans…
[Page 2] WHEREAS, the Parties signatory to this Agreement acknowledge the Authority’s Small Business Policy and established overall 30% Small Business Goal, inclusive of microbusinesses, a 10% DBE and a 3% DVBE goal within the 30% overall goal and shall exercise full support of this Policy in the implementation of this Agreement in ensuring maximum utilization of Small Businesses on the project…
The “Jobs Coordinator” is going to be busy.
Section 1.12 defines “Jobs Coordinator” as “the Prime Contractor designee responsible for the facilitation and implementation of the Targeted Hiring Requirements of this Agreement. The Jobs Coordinator must be able to demonstrate or document to the AUTHORITY the requisite qualifications and/or experience to fulfill the duties and responsibilities.”
Section 7.6 states that “Disadvantaged Workers will be referred to the Unions from the Jobs Coordinator qualified to perform construction jobs coordination and related services…”
It appears that the design-build consortium will need to hire internal staff or an outside firm to handle the Jobs Coordinator responsibilities. Once again, the unions give the responsibility for documenting recruitment and hiring to the contractor, even though it’s the unions that run the hiring halls and dispatch the workers.
Hiring of Veterans: A Lot of Talk, but What Is the Actual Performance?
Section 7.8 of the Project Labor Agreement is a vague summary of Helmets to Hardhats. Unions that are pressuring public officials for Project Labor Agreements focus quite a bit of their lobbying and public relations message on their “Helmets to Hardhats” program, meant to initiate veterans into careers in the construction trades – or more accurately, careers in the unionized construction trades. The program is operated through a union-affiliated program authorized by the Labor-Management Cooperation Act of 1978. The program appears to be a contact point for veterans looking for construction trade work. It refers them to the applicable local union office.
The one case I’ve seen in which someone tried to measure the success of Helmets to Hardhats revealed a stunning 100% failure. See my article www.PublicCEO.com Exposes Empty Promises of Helmets to Hardhats Program Under Project Labor Agreement in Northern California.
Here’s something particularly outrageous in this Project Labor Agreement related to the Helmets to Hardhats program:
[Page 20] Section 7.8.3 In recognition of the work of the Center and the value it will bring to the Project, the Authority shall make a contribution of $2,000 per month to the Center on behalf of itself and all other Employers employing workers under the terms of this Agreement. The contribution shall begin the first month during which Project Work is performed and end upon completion of all Project Work. Section 7.8.5 If the Authority fails to pay contributions owed to the Center within thirty (30) days of the date when such contributions are due, it shall be liable to the Trust for all costs of collection incurred by the Trust, including, attorneys’ fees and court costs. The Trustees are empowered to initiate proceedings at law or equity, and to take any other lawful action necessary to collect contributions due.
These unions are so cheap that they are contractually requiring the taxpayer-funded California High-Speed Rail Authority to pay $2000 per month to their own Helmets to Hardhats program. And they threaten to take the High-Speed Rail Authority to court if it doesn’t pay on time!
Terms and conditions of employment and labor peace procedures are the real meat in this Project Labor Agreement, of course.
Terms and conditions of employment and labor peace procedures are the real meat in this Project Labor Agreement, of course. Here’s my analysis of key provisions:
[Page 1] The purpose of this Community Benefits Agreement (Agreement) is to facilitate careers in the construction industry and to promote employment opportunities during the construction of the High Speed Rail System (Project) awarded by the California High Speed Rail Authority, remove potential barriers small businesses may encounter in participating in this Project…
Comment: The requirement to sign a 29-page union agreement would normally be regarded as a barrier for a small business to participate in a project, rather than the removal of a barrier. Also, the requirement to pay union dues and fees (Article 6.2) and be referred to a job by a union (Article 7.1) would seem to complicate employment opportunities.
[Pages 1-2] The purpose of this Community Benefits Agreement (Agreement) is…to provide for the orderly settlement of labor disputes and grievances without strikes or lockouts…the interests of the general public, the Authority, the Unions, contractors, subcontractors, employers and workers would be best served if the construction work proceeded in an orderly manner without disruption because of strikes, sympathy strikes, work stoppages, picketing, lockout, slowdowns or other interferences with work…
Comment: Do union officials anticipate that there may be strikes and other union work disruption during the construction of the California High-Speed Rail unless all contractors sign the Project Labor Agreement with the unions? Someone needs to ask!
[Page 1] WHEREAS, increasing access to employment opportunities with prevailing wages is one way for the Authority to directly combat poverty and unemployment;
Comment: Contractors are already required by state law to pay state-mandated wage rates (“prevailing wages”) to construction workers on projects of the California High-Speed Rail Authority. And the Project Labor Agreement actually EXEMPTS the project from state monitoring and enforcement compliance programs that would normally apply!
California Labor Code Section 1773.1(b)(3) – enacted through Assembly Bill 436 (2011) and supported by the State Building and Construction Trades Council of California – exempts a project funded by state bonds from making payments to the State Public Works Enforcement Fund of the California Department of Industrial Relations for prevailing wage compliance and enforcement “if the awarding body has entered into a collective bargaining agreement that binds all of the contractors performing work on the project and that includes a mechanism for resolving disputes about the payment of wages.” This is the definition of a Project Labor Agreement.
Section 8.3 of the Project Labor Agreement states that “the Authority shall monitor the compliance of all Contractors and Subcontracts with all Federal and state prevailing wage laws and regulations. All complaints regarding potential wage violations shall be referred to the Authority for processing, investigation and resolution.” It appears that unions are using the Project Labor Agreement to compel the California High-Speed Rail Authority to establish a labor compliance program (internally or contracted to an outside firm) for prevailing wage compliance and monitoring (as opposed to using the Department of Industrial Relations Compliance Monitoring Unit). Are the unions too cheap to do it themselves through their own union-affiliated labor compliance programs?
[Page 4-5] Section 1.17 …On-site fabrication work includes work done for the Project in temporary yards or areas near the Project. All fabrication work over which the AUTHORITY possesses the right of control…and which is traditionally claimed as on-site fabrication shall be performed on-site…such work may be performed off-site. In that event, such fabrication work shall be performed in accordance with the union standards established by this Agreement for the appropriate craft Union or a fabrication agreement approved by the craft’s International Union. On-site construction shall also include…
Comment: This long section is meant to prevent a contractor from classifying work covered under union Master Labor Agreements (collective bargaining agreements) as off-site fabrication in order to evade the conditions of the Project Labor Agreement or state-mandated construction wage rate (“prevailing wage”) requirements. The Sheet Metal Workers Union is especially concerned about off-site fabrication of duct work, and the Project Labor Agreement specifically cites coverage of their classifications of work.
[Page 6] Section 2.3 Project Labor Disputes: The provisions of this Agreement, including the Schedule A Agreements, (which are the local collective bargaining agreements of the signatory Unions having jurisdiction over the work on the Project, as such may be changed from time-to-time and which are incorporated herein by reference) shall apply to the work covered by this Agreement. All Project Work shall be performed as provided in the applicable Schedule A Agreement. Where there is a provision in a Schedule A Agreement and not covered by this Agreement, the provision of the Schedule A Agreement shall prevail. Where there is a provision in this Agreement, it shall prevail over any conflicting provision of a Schedule A Agreement. All disputes relating to the interpretation or application of this Agreement shall be subject to resolution by the dispute resolution procedures set forth herein.
Comment: As acknowledged in the section of this provision surrounded by parenthesis, a contractor that signs this Project Labor Agreement is not only bound by its provisions, but is also bound by certain provisions of the standard Master Labor Agreement (collective bargaining agreement) that applies to work classifications within the jurisdiction of the applicable union in that applicable geographical region. Some non-union contractors foolishly sign a Project Labor Agreement without realizing that it extends to provisions in other union agreements.
However, notice that Section 3.1 states that “This Agreement is not intended to supersede collective bargaining agreements between any of the Contractors/Employers performing construction work on the Project and Union Signatory thereto except to the extent the provisions of this Agreement are inconsistent with such collective bargaining agreement, in which event the provisions of this Agreement shall apply.” In other words, the Project Labor Agreement is supreme. Some union contractors and unionized construction associations object to government-mandated Project Labor Agreements because those agreements – often negotiated with deference to the demands of the unions – subvert the collective bargaining agreements they worked hard to negotiate.
[Page 7] Section 2.4.6 Notwithstanding the foregoing, it is understood and agreed that Building/Construction Inspector and Field Soils and Material Testers (inspectors) are a covered craft under this Agreement. This inclusion applies to the scope of work defined in the State of California Wage Determination for that Craft. Every Inspector performing under these classifications pursuant to a professional services agreement or a construction contract shall be bound to all applicable requirements of this Agreement…
Comment: Construction trade unions such as the Operating Engineers continue their efforts to organize workers in construction-related professional services into unions, as if these occupations were traditional building trades. In 2000, Governor Gray Davis signed into law Senate Bill 1999, which added a section to the definition of “public works” in California Labor Code Section 1720(a)(1) to include “design and preconstruction phases of construction , including, but not limited to, inspection and land surveying work.” This placed such work under state-mandated construction wage rate (“prevailing wage”) requirements.
[Page 7] Section 3.2 It is understood that this Agreement constitutes a self-contained, stand-alone agreement…[the contractor] will not be obligated to sign any local, area or national collective bargaining agreement as a condition of performing work within the scope of this Agreement…Section 3.3 Contractors not signatory to the established Joint Labor/Management Trust Fund Agreements, as described in the Schedule A Agreement(s) for the craft workers in their employ, shall sign a “subscription agreement” with the appropriate Joint Labor/Management Trust Funds covering the work performed under this agreement before work is commenced on the Project.
Comment: This provision means that if a non-union contractor signs the Project Labor Agreement, it is not bound to the collective bargaining agreement for the applicable union for that trade in that geographic region. However, the contractor WILL have to sign “subscription agreements” binding it to the terms and conditions of the union-affiliated health insurance programs, pension programs, vacation programs, apprenticeship programs, and “other” union-affiliated slush funds used for labor compliance monitoring, contract administration, and a wide variety of vague “industry advancement” programs authorized under the obscure federal Labor-Management Cooperation Act of 1978. (Some of that “other” money is contributed to California state and local campaigns for and against ballot measures – a practice becoming more common each election.) All of these employer payments are incorporated into state prevailing wage determinations.
[Page 8] Section 3.4 So that the public, the Unions and the employees have complete information, the AUTHORITY shall immediately post copies of all executed Letters of Assent on a dedicated page on its website…[the contractor] shall be removed from the Project unless an executed Letter of Assent is posted within 48 hours.
Comment: As the former head of the Los Angeles-Orange County Building and Construction Trades Council, new State Building and Construction Trades Council of California president Robbie Hunter is surely aware of how small contractors sometimes try to slip in and out of construction projects for local governments such as the Los Angeles Unified School District without signing the Project Labor Agreement and making the fringe benefit payments to the union trust funds. There will be extra accountability on the High-Speed Rail project.
[Pages 9-14] Article 4 Work Stoppages and Lockouts
[Pages 21-24] Article 9 Dispute Resolution Procedure
[Pages 24-25] Article 11 Jurisdictional Disputes
[Page 25] Article 12 Employee Grievance Procedure
[Page 27] Article 16 Pre-job Conference
Comment: These are the substantial provisions about procedures and arbitrators in Project Labor Agreements that governments and developers hope will prevent strikes and other work disruption directed by top union officials. It doesn’t always work: sometimes workers decide on their own to walk off the job (note the provision in Section 4.4 that No Union shall be liable for independent acts of employees), and sometimes a union is simply determined to make a statement about a grievance during a jurisdictional dispute with another union over work classifications. Nevertheless, Section 4.3 states that “the Union will promptly make good efforts to cease such Project work disruption.“ (A For Effort.)
[Page 15] Section 6.1 [the contractors] recognize the Unions as the sole and exclusive bargaining representatives of all craft employees working within the scope of this Agreement.
Section 6.2 No employee covered by this Agreement shall be required to join any Union as a condition of being employed, or remaining employed, for the completion of the Project work…employees working on the Construction Contract…comply with the applicable Union’s security provisions for the period during which they are performing on-site Project work to the extent, as permitted by law, of rendering payment of the applicable monthly dues and any working dues…
Comment: Workers don’t have to be full-fledged members of the union, but they have to pay union initiation fees, monthly dues, and working dues as the cost of union representation. California is not a Right-to-Work state, and unions don’t want any “freeloaders” on the job who don’t pay dues and fees.
[Page 15] Section 7.1 [Contractors] recognize that the Unions shall be the primary source of all craft labor employed on the Construction Contract for the Project. For each craft, the local Union with geographic jurisdiction over the work to be performed shall make referrals of employees to the requesting [contractor]. [Contractors] utilizing core employees shall follow the procedures outlined below…
Section 7.2. [Contractors] shall be bound by and utilize the registration facilities and referral systems established or authorized by this Agreement and the signatory Unions…
Comment: Contractors will obtain their workers from the “hiring halls” of the construction trades through the unions’ internal dispatching procedure for workers waiting for a job. Unions have certain rules about who gets priority in the list of workers waiting to be dispatched.
[Page 16] Section 7.1.2 The number of Core Workers on the Project for C/S/Es covered by this Agreement shall be governed by the following procedure: one Core Worker shall be selected and one worker from the hiring hall of the affected trade or craft and this process shall repeat until such C/S/E’s requirements are met or until such C/S/E has hired five (5) such Core Workers for that craft., whichever occurs first. Thereafter, all additional employees in the affected trade or craft shall be hired exclusively from the applicable hiring hall list.
Comment: There is one limited exception in the Project Labor Agreement to the requirement that a contractor obtain workers via the union hiring hall dispatching process. As stated in Section 7.1, a contractor can keep a limited number of “Core Workers” whom the company has employed for 60 of the 100 days immediately before the job is awarded (apparently by the design-build entity) to the contractor. But the contractor has to alternate between using a Core Worker and getting a worker dispatched from the union, and no more than five Core Workers can be used.
[Page 21] Section 8.1 All employees covered by this Agreement (including foremen and general foremen if they are covered by the Schedule A Agreement) shall be classified and paid wages, benefits, and other compensation including but not limited to travel, subsistence, and shift premium pay, and contributions made on their behalf to multi-employer trust funds, all in accordance with the then current multi-employer Schedule A Agreement of the applicable Union. 8.2 Each [contractor] adopts and agrees to be bound by the written terms of the applicable, legally established, trust agreement(s), to the extent said trust agreements are consistent with this Agreement…[contractors] further agree to sign the applicable trust agreement “subscription” agreement(s) if required by the Craft Union on behalf of the Craft employees in order to make the employee contributions to the pension, annuity, health and welfare, vacation, apprenticeship, training trusts, etc.
Comment: Contractors pay fringe benefits (health care, retirement, training, etc.) to the unions. If contractors have their own employee benefit programs (401k, etc.) independent of unions, they are still required to pay their employees’ fringe benefits to the union programs. This can be a supplemental flow of money into underfunded union-affiliated pension plans, as such employees will not enjoy those benefits unless they remain with the union until eligible or vested.
The requirement for non-union contractors to pay fringe benefits to union programs instead of their own benefit plans (unless they want to pay benefits twice) is a major deterrence and competitive disadvantage for non-union contractors that might otherwise consider signing a Project Labor Agreement. Other ramifications of this provision include possible contractor liability for unfunded multi-employer pension plans and exposure of company financial data to union officials for audits.
Is this what 52.5% of California voters wanted in November 2008 when they approved Proposition 1A, the Safe, Reliable High-Speed Passenger Train ballot proposition? Of course not!