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Project labor agreements under fire from nonunion contractors

AGC files discrimination suit against school district

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The topic of project labor agreements is sensitive one in the construction industry. It seems to divide union and nonunion contractors, organizations and even public agencies.

Over the past year, this topic has really heated up as several public agencies have talked about placing a project labor agreement, which by all accounts favor union contractors.

In San Diego, a project labor agreement (PLA) is a binding contract with a construction group -- almost always the San Diego Building and Construction Trade Council. The agreement provides guidelines and prerequisites on which general contractors and subcontractors the public entity can hire.

Union contractors are in favor of PLAs because the agreements give their members an advantage when it comes to being awarded jobs.

Tom Lemmon, business manager for the San Diego Building and Construction Trade Council, has said in the past these types of agreements help contractors get better wages and benefits like heath and dental care, including more money to go into their retirement system.

"PLAs make sure that local guys get first stab at getting to work on local projects," Lemmon said.

Nonunion contractors are typically opposed to labor agreements. They argue that it discourages them from bidding on projects because the many restrictions and guidelines force nonunion contractors to either pay into union dues or join them.

"Nonunion, open shop contractors do not like (PLAs) because even though there is nothing in the agreement that prohibits them directly from bidding on any of the (projects), it does discourage them, according to Associated Builders and Contractors San Diego President and CEO George Hawkins on a previous occasion.

Hawkins added that typical labor agreements ask nonunion contractors to enter into a "Schedule A," which limits how many of their own workers, general contractors or subcontractors they can bring onto a jobsite and stipulates how much nonunion contractors must submit into the union retirement fund.

"Why would nonunion contractors want to enter into an agreement with these provisions?" Hawkins said.

Currently there is only one labor agreement in the county of San Diego. It pertains to all the work being done on Proposition S construction projects for the San Diego Unified School District.

This issue goes back to the second half of 2008 when the school district and both union and nonunion contractors supported Proposition S -- a $2.1 billion bond measure passed that calls for all the district's schools to be repaired and renovated.

During this time, several hundreds of thousands of dollars were donated to the "Yes on Prop. S" campaign, including $180,000 by the San Diego chapter of the Associated General Contractors (AGC), which is anti-union.

The group provided the money because it thought the proposition would bring construction jobs to nonunion contractors. But after Proposition S was passed in November 2008, whispers came that a labor agreement would be placed on all work pertaining to the bond measure.

In mid-January of this year, the school board passed a resolution that only allowed the San Diego Building and Construction Trade Council to negotiate with the district in creating a labor agreement.

In late May, the school board approved a labor agreement, which it called a Project Stabilization Agreement. The 35-page contract sets the hiring guidelines for contractors on any Proposition S project; establishes set wages, hours and working conditions, and pays for health insurance for workers; and prevents worker stoppages such as strikes, slowdowns or lockouts, which nonunion contractors believe discourages them from being hired.

This is the first school district in the county to implement some sort of labor agreement on taxpayer-funded construction projects.

On July 30, the AGC filed a lawsuit against the school district because it insists the Project Stabilization Agreement discriminates against hiring nonunion apprentices.

The issue of project labor agreements has also come up on other projects in the county in recent memory, but has not been implemented for one reason or another. These include the Terminal 2 expansion at Lindbergh Field; the proposed civic center, which has still not been approved by the City Council; and the proposed convention center in Chula Vista, a project that has since been terminated.

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