Construction Issues Construction Issues and Labor Strikesand Labor Strikes

IASBO 60IASBO 60thth Annual Conference Annual ConferenceMay 18, 2011May 18, 2011

Stuart L. WhittStuart L. Whitt70 S. Constitution Drive70 S. Constitution Drive

Aurora, Illinois 60506Aurora, Illinois 60506630-897-8875630-897-8875

swhitt@whittlaw.comswhitt@whittlaw.com

School Districts School Districts and Labor Unionsand Labor Unions

Most school districts are familiar with labor Most school districts are familiar with labor unions that unions that represent their teachers and support staffrepresent their teachers and support staff represent those employed by contractors who represent those employed by contractors who

construct or renovate facilitiesconstruct or renovate facilities represent those employed by other vendors represent those employed by other vendors

providing labor to school districts, e.g. student providing labor to school districts, e.g. student transportation companiestransportation companies

Labor Unions and Labor Unions and Construction ProjectsConstruction Projects

There is no obligation to award construction projects to There is no obligation to award construction projects to contractors with a unionized workforcecontractors with a unionized workforce

Illinois Law only requires that “a wage of no less than the Illinois Law only requires that “a wage of no less than the general prevailing hourly rate…be paid to all laborers, general prevailing hourly rate…be paid to all laborers, workers and mechanics employed by or on behalf of any workers and mechanics employed by or on behalf of any and all public bodies engaged in public works.” and all public bodies engaged in public works.” Prevailing Wage Act, 820 ILCS 130/1Prevailing Wage Act, 820 ILCS 130/1

The “general prevailing hourly rate” is typically the union The “general prevailing hourly rate” is typically the union rate in the localityrate in the locality

Prevailing Wage Act vs. Competitive Bidding Prevailing Wage Act vs. Competitive Bidding Requirements of Section 10-20.21Requirements of Section 10-20.21

of the School Code of the School Code

Section 10-20.21 requires school boards to award all Section 10-20.21 requires school boards to award all contracts, with certain exceptions, to the “lowest responsible contracts, with certain exceptions, to the “lowest responsible bidder, considering conformity with specifications, terms of bidder, considering conformity with specifications, terms of delivery, quality and serviceability.”delivery, quality and serviceability.”

Under the Prevailing Wage Act, the lowest responsible bidder Under the Prevailing Wage Act, the lowest responsible bidder on projects involving public works must pay the prevailing on projects involving public works must pay the prevailing hourly ratehourly rate

There is no requirement that school districts employ only There is no requirement that school districts employ only union contractorsunion contractors

Regardless, union disputes present certain perils for your Regardless, union disputes present certain perils for your construction projectsconstruction projects

Informational PicketingInformational Picketing

In the current economic climate, construction jobs are highly In the current economic climate, construction jobs are highly covetedcoveted

Labor unions are very watchful of public projects to protect Labor unions are very watchful of public projects to protect their memberstheir members

If a contractor or subcontractor employs non-union workers, If a contractor or subcontractor employs non-union workers, you can anticipate informational picketing at your job siteyou can anticipate informational picketing at your job site

Informational picketing is generally directed at the public and Informational picketing is generally directed at the public and not the employees of the non-union contractor or the not the employees of the non-union contractor or the employees of any other contractor servicing the jobemployees of any other contractor servicing the job

That said, informational picketing can stop your project in its That said, informational picketing can stop your project in its trackstracks

Impact of Informational PicketingImpact of Informational Picketing

The project: new $75 million high schoolThe project: new $75 million high school

All major trades: unionized laborersAll major trades: unionized laborers

Subcontractors: unionized laborersSubcontractors: unionized laborers

Exception: athletic field bleacher subcontractor Exception: athletic field bleacher subcontractor employing non-union workers, but paying employing non-union workers, but paying prevailing wageprevailing wage

The result: The result:

School District’s ResponseSchool District’s Response

Litigation: so long as the picketing can be construed as Litigation: so long as the picketing can be construed as informational, educating the public about a particular informational, educating the public about a particular contractor, you will not be successful in securing an contractor, you will not be successful in securing an injunction injunction

Self-help: you can establish a “neutral gate” for Self-help: you can establish a “neutral gate” for contractors who are not immediately involved in the contractors who are not immediately involved in the disputedispute

Goal: one gate for the informational picketers and Goal: one gate for the informational picketers and another for the uninvolved contractorsanother for the uninvolved contractors

Common Result: many union laborers will not cross a Common Result: many union laborers will not cross a picket line, even through a neutral gatepicket line, even through a neutral gate

What’s a School District To Do?What’s a School District To Do?

Remove the non-union contractor from the site Remove the non-union contractor from the site when other unionized contractors are present; when other unionized contractors are present; for examplefor example Buy the non-union contractor out of his contract and Buy the non-union contractor out of his contract and

replace with union laborreplace with union laborCan be relatively expensive but gets the project back on Can be relatively expensive but gets the project back on tracktrack

Direct the non-union contractor to perform his work Direct the non-union contractor to perform his work during off hours when the other trades are not presentduring off hours when the other trades are not present

Informational picketing should stop, but if it Informational picketing should stop, but if it doesn’t, then go to the NLRBdoesn’t, then go to the NLRB

National Labor Relations BoardNational Labor Relations Board

School districts are familiar with the Illinois School districts are familiar with the Illinois Educational Labor Relations BoardEducational Labor Relations Board

Private employers are governed by the National Private employers are governed by the National Labor Relations Board (NLRB)Labor Relations Board (NLRB)

Pursuant to Section 8(b)(4)(B) of the NLRA it is Pursuant to Section 8(b)(4)(B) of the NLRA it is an unfair labor practice for a labor organization an unfair labor practice for a labor organization to “threaten, coerce, or restrain any person” to “threaten, coerce, or restrain any person” where an object is “forcing or requiring any where an object is “forcing or requiring any person…to cease doing business with any other person…to cease doing business with any other person”, among other thingsperson”, among other things

Example of an Unfair Example of an Unfair Labor PracticeLabor Practice

The project: summer high school renovationThe project: summer high school renovation

All major trades: unionized laborersAll major trades: unionized laborers

Separate minor contract: non-union electric Separate minor contract: non-union electric contractorcontractor

The result: The result:

School District’s ResponseSchool District’s Response

All other contractors refused to cross the picket line, causing All other contractors refused to cross the picket line, causing all work to stopall work to stop

School district removed non-union contractor from the site, School district removed non-union contractor from the site, but union persisted in picketingbut union persisted in picketing

Superintendent confronted the picketers and asked them to Superintendent confronted the picketers and asked them to stop their unlawful activity, but they refusedstop their unlawful activity, but they refused

School district’s attorney wrote a letter to the union business School district’s attorney wrote a letter to the union business agent demanding that the union cease and desist its agent demanding that the union cease and desist its unlawful activity and warned of an impending NLRB chargeunlawful activity and warned of an impending NLRB charge

Union refusedUnion refused

School District’s ResponseSchool District’s Response

School district filed an unfair labor practice School district filed an unfair labor practice charge against labor organization, NLRB Form charge against labor organization, NLRB Form 508508

Unfair labor practice chargeUnfair labor practice charge was filed against the local union and its business was filed against the local union and its business

agent agent cited Section 8(b)(4)(B) of the NLRA cited Section 8(b)(4)(B) of the NLRA included a clear statement of the facts included a clear statement of the facts attached photos of the picketingattached photos of the picketing attached the demand letter with proof of serviceattached the demand letter with proof of service was supported by an affidavit from the superintendentwas supported by an affidavit from the superintendent

The ResultThe Result

NLRB opened a case and served notice of the charge upon NLRB opened a case and served notice of the charge upon the union localthe union local

NLRB pressured the local to withdraw its pickets, which the NLRB pressured the local to withdraw its pickets, which the union agreed to dounion agreed to do

Work resumed by the union contractors Work resumed by the union contractors

Non-union contractor completed its work at night or on Non-union contractor completed its work at night or on weekendsweekends

Had the union not withdrawn its pickets, an order from the Had the union not withdrawn its pickets, an order from the NLRB would have followed and would serve as the basis for a NLRB would have followed and would serve as the basis for a court action to secure injunctive and monetary reliefcourt action to secure injunctive and monetary relief

What if a Union is on Strike?What if a Union is on Strike?

The DilemmaThe Dilemma

In July 2010 the International Union of Operating In July 2010 the International Union of Operating Engineers went on strike shutting down a Engineers went on strike shutting down a number of projects, including at least 2 large number of projects, including at least 2 large high school renovations and expressway high school renovations and expressway construction in the Chicagoland areaconstruction in the Chicagoland area

Given the summertime construction the start of Given the summertime construction the start of school was in perilschool was in peril

2 school districts negotiated Project Labor 2 school districts negotiated Project Labor Agreements with the local building trades council Agreements with the local building trades council and regional construction alliance and regional construction alliance

Project Labor AgreementProject Labor Agreement

The parties: school district, local building trades council, The parties: school district, local building trades council, regional construction alliance and contractors awarded regional construction alliance and contractors awarded construction work directly or indirectly by the districtconstruction work directly or indirectly by the district

The work: new construction, renovation, repair work, The work: new construction, renovation, repair work, site work and dedicated off-site worksite work and dedicated off-site work

Term: Negotiable but 7 to 10 years is not uncommonTerm: Negotiable but 7 to 10 years is not uncommon

District has the absolute right to select any qualified District has the absolute right to select any qualified bidder without reference to whether the bidder is a bidder without reference to whether the bidder is a signatory to any labor agreement, but the bidder must signatory to any labor agreement, but the bidder must become a party to the Project Labor Agreementbecome a party to the Project Labor Agreement

Project Labor AgreementProject Labor Agreement

Advantages: Advantages:

Disadvantages:Disadvantages:

QuestionsQuestions