Now will New York State listen?

As regular readers of TheTruthAboutPLAs.com remember, the Champlain Bridge project is a $110 million joint effort between New York State and Vermont – with significant federal financial support – to rebuild a major thoroughfare between their two states.  The New York State Department of Transportation (NYSDOT) has taken the lead on spearheading the project’s construction.

As we posted Mar. 23, the Albany Times Union reported that the NYSDOT is soliciting bids for the project without a PLA requirement.  Shortly after this article was released, acting NYSDOT Commissioner Stanley Gee issued a statement saying that no final decision had been made regarding a PLA mandate.

Despite Mr. Gee’s claim that no decision on whether to require a PLA, Vermont Agency of Transportation Director of Program Development Richard Tetreault apparently received NYSDOT’s draft PLA proposal a day later.

Then on Mar. 25, Mr. Tetreault shared his thoughts on the draft, which mirrors most PLAs throughout the country, in a letter to the NYSDOT (Our emphasis added):

Dear Mr. Dennison [Robert Dennison, NYSDOT Chief Engineer]:

We have reviewed the proposed Project Labor Agreement (PLA) for the Lake Champlain Bridge project that you sent via email yesterday evening.  We have significant issue with the PLA, which precludes me from signing any amendment to the currently approved and advertised project’s PS&E if it includes the PLA.

Our concern focuses on one primary reason: The unionize labor provisions in the agreement essentially preclude every Vermont-based contractor in Vermont from participating as the General Contractor or Subcontractor on the project without overhauling their entire workforce and seeking employee approval through an obviously onerous process.  Any PLA included in the project with our concurrence must have significant changes to any unionized labor provisions to make them fair and unburdensome to Vermont-based contractors and subcontractors.

I appreciate the time and effort you put into trying to negotiate a PLA agreeable to all parties.  The bottom line, however, is that Vermont finds the proposed PLA unacceptable.

Mr. Tetreault isn’t the only Vermont public servant to express their displeasure with PLAs to the NYSDOT.  On Mar. 26, the Vermont General Assembly House and Senate Transportation Committee chairs signed a joint letter stating:

The Committees would oppose any Project Labor Agreement (PLA) with terms that would have the effect of imposing higher costs on non-union contractors or subcontractors relative to the costs of union contractors or subcontractors, or otherwise would have the effect of putting any Vermont contractors or subcontractors at a competitive disadvantage.  Moreover, the Committees would oppose any PLA with terms prescribing that Vermont contractors or subcontractors hire outside their usual labor pool, or specifying that they preferentially hire outside their usual labor pool before hiring within it.

We have obtained a copy of the proposed draft PLA and Mr. Tetreault is exactly right.  This PLA is almost identical to the PLAs that we see all over the country.  If mandated, this PLA will make contractors recognize the union as the sole representative of their employees, require employees to pay union dues, forces contractors to hire out of the union hiring halls and requires them to pay into union pension and health trust funds, from which their nonunion employees will never see a penny worth of benefit.

In addition to increasing construction costs by as much as 18 percent, this PLA will lead to many of the discriminatory effects the House and Senate Transportation Chairmen mentioned in their letter.  Job opportunities for this project will only be open to the less than 5 percent of Vermont’s construction workforce that is unionized.

The ultimate result is that Vermont’s nonunion construction workforce need not apply thanks to New York’s construction union bosses and their connections to elected officials.  From the Albany Times Union’s March 29 coverage:

Officials on both sides of the argument say NY DOT isn’t thrilled with a PLA, but Gov. David Paterson’s top aides want one. DOT officials say they won’t discuss negotiations. Nor will they give the Times Union the DOT-funded consultant’s report on the feasibility of a PLA.

Here at TheTruthAboutPLAs.com, we urge leaders in both states to scrap the proposed PLA.  It is bad public policy that will cost taxpayers and the vast majority of construction workers dearly.

We also encourage anyone interested in this project to review ABC National’s Feb. 17 statement to the Vermont Senate Transportation Committee on the proposed Champlain Bridge project PLA.

Lake Champlain Bride project news wrap up:

Albany Times Union, “Bridge Deal Irks Vermont”

Burlington Free Press, “Vermont Rejects Labor Agreement for Champlain Bridge Project”

Battleboro Reformer, “Labor Trouble Looms Over Champlain Bridge Project”

Rutland Herald, “VT Possibly Shut Out of Work”

Vermont Today, “Labor Rules Pose Problem for State in Building Lake Champlain Bridge“

A new survey conducted by the Suffolk University Political Research Center for the Beacon Hill Institute shows that 69% of Massachusetts voters oppose a requirement under which private contractors who perform public projects must hire workers through union hiring halls. The finding is important because the requirement is a key feature of Project Labor Agreements (PLAs), which are strongly favored by construction unions for conducting public projects.

Last year, President Obama issued an executive order encouraging the use of PLAs on federal construction projects. The order is controversial in part because PLAs require contractors to use labor provided by the unions, whether or not their own workers are union members.

Proponents argue that PLAs guarantee the availability of a skilled workforce and labor “peace.” Opponents argue that nonunion workers are just as a skilled as union workers and that the requirement puts nonunion contractors at a competitive disadvantage, penalizes the vast majority of construction workers, who do not belong to unions, and increases construction costs. Worries about labor peace, say opponents, are an empty threat.

Opposition to the idea of requiring construction contractors to hire through union hiring halls runs counter to voters’ otherwise sympathetic attitudes to unions. The same survey showed that a majority (52%) of Massachusetts voters have a favorable opinion of unions. It also found that only 19% of voters believe that public sector union workers are overpaid.

The requirement that construction contractors hire their workers through union hiring halls is opposed by almost every segment of the electorate. Eighty‐eight percent (88%) of Republicans, 76% of Independents and 52% of Democrats oppose the requirement. Even among households with union members, 59% are opposed. Opposition is consistent across voters segmented according to age, gender, race and attitudes toward candidates for governor and the U.S. Senate. Only the 15% of voters who have a “very favorable” view of unions support the requirement.

The survey suggests that public opinion of project labor agreements may be sensitive to perceptions about the degree to which construction workers are unionized. Seventy‐three percent (73%) of the respondents estimated that the fraction belonging to unions is 40% or more. In fact, only about 20% of private construction workers in Massachusetts belong to unions. Respondents were given this fact before they were asked about hiring through union hiring halls.

David G. Tuerck, Executive Director of the Institute said that “elected officials who must decide whether to enter into PLAs on public construction projects should be interested in the results of the survey. Apparently, when voters are informed of the facts concerning union membership, they do not support a key feature of PLAs.”

The statewide survey of 500 Massachusetts registered voters was conducted Feb. 21‐24, 2010.

The margin of error is +/‐ 4.4 percent at a 95 percent level of confidence. Cross-tabs.

See The Boston Herald for additional coverage, (“Poll: Don’t Mandate Unions on Projects,” 3/4/10).

While some PLAs permit a nonunion contractor to use a limited number of their core workforce (usually the lesser of 8 employees or 12 percent of the trade’s total workforce), most PLAs require an all-union workforce.

For those few nonunion employees that work on a PLA project, PLAs require that they are hired through the union hiring hall where they are often subject to union intimidation to join a union. While on the jobsite, PLAs force nonunion employees to follow unfamiliar union work rules and pay union fees for the life of a PLA project. 

Employer contributions to employee benefits must be paid into labor-management (union) run plans rather than existing plans offered by their nonunion employer. Employees will forfeit these contributions earned for hours worked on a PLA jobsite to the union plans unless they join a union and become vested. 

A 2009 study by Dr. John R. McGowan, “The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements” found that nonunion employees of nonunion contractors that are forced to perform under government-mandated PLAs suffer a reduction in their take home pay that is conservatively estimated at 20 percent because of the “pension” provision in typical PLAs.  Hundreds of millions of dollars of their income would be distributed to union pension funds, from which the nonunion workers will receive no benefits. It’s no wonder why nonunion contractors and their employees oppose PLAs.

The study found that had President Obama’s pro-PLA Executive Order 13502 applied to federal contracts in 2008, additional costs incurred by employers related to wasteful PLA pension requirements would likely have ranged from $230 to $767 million per year. In total, the move to PLAs could cost nonunion workers and their employers $414 million to more than $1.38 billion annually.

In short, nonunion employees experience a Big Labor shakedown on PLA projects.

Big Labor will be quick to refute this poll with arguments that PLAs don’t require an all-union workforce and nonunion contractors can bid on PLA projects. While both claims may be technically true, the reality is that PLA proponents must rely on distorted facts instead of superior value and performance to secure work for their members and regain lost market share.