5/4/08

Ban on non-union construction questioned

Contractors sue city over project labor agreement

A lawyer for a building contractors' association filed a lawsuit against the city of Juneau, Alaska last week, saying the way it doles out construction contracts is unfair. At issue is the city's project labor agreement, or PLA, for the upcoming renovations of Harborview Elementary School. Bids for the estimated $14 million project are due May 7 and require that contractors agree to certain labor practices, including hiring only union tradesmen, to be eligible to win the job.

Project labor agreements serve "no legitimate public purpose," and favor "union contractors over non-union contractors," according to the court records filed on behalf of the Associated Builders and Contractors of Alaska.

Bill Shattenberg, who owns Anchor Electric, is also listed as a plaintiff in the lawsuit. He said his company won't take part in any project labor agreements with the city because it would force the electricians employed on those projects to join unions they have no interest in joining and decrease their take-home pay.

He also said a project labor agreement would force him to increase his overall bid by 20 percent. That added cost to non-union shops like his, Shattenberg said, hurts the city because it limits the number of contractors that can make reasonable bids.

"PLAs limit competition, that's the problem," Shattenberg said. "And it excludes local companies ... and their employees from working on city projects."

On Friday, Shattenberg sent an e-mail to members of the Juneau Assembly naming four other local contractors that he said would not bid on the Harborview project or any other city project that had a project labor agreement.

"If your intent was to exclude local businesses and labor from city jobs when there is already a severe labor shortage, then job well done, mission accomplished," Shattenberg wrote.

The city has used project labor agreements on eight construction projects since 1996, including the recent expansion of Bartlett Regional Hospital and the construction of a new $60 million high school in the Mendenhall Valley, according to City Attorney John Hartle.

In March, the Assembly passed a nonbinding resolution supporting project labor agreements on city construction projects. And the city's head engineer, Roger Healy, has made project labor agreements part of five future city construction jobs, which include building a parking garage and renovating the airport's terminal. Bids for the city projects, which add up to $50.5 million, are due over the next eight months.

Healy said project labor agreements were necessary because of the large amount of work required over a small period of time.

"It is imperative to the success of all projects that uniform work rules and wages apply to all projects to avoid piracy of workers between projects," Healy wrote in a memo to the city manager and attorney last month. "PLAs ... will help to assure a steady supply of competent labor for all projects."

But in a February memo explaining why he had removed a project labor agreement from a renovation project at Glacier Valley Elementary School, Healy expressed concern that it could limit the number of potential bidders for city projects and lead to higher-than-planned costs.

Healy wrote that on recent projects there had only been a single bidder.

"This is not a reflection on labor, but rather on bidding climate that PLAs may impose on local conditions," Healy wrote. "The facts are in dispute. Cost savings and efficiencies may be realized by a trained and more regimented workforce during construction, but the PLA requirement may limit the contractor bidding pool, thereby driving owner costs upward without any recourse by the (city)."

Mike Notar, president of the Juneau & Vicinity Building and Construction Trades Council said past city jobs with project labor agreements had come in "on time and under budget."

He also listed the benefits project labor agreements provided for the city. "They get labor harmony, they get a broad diverse workforce of all skilled trades, they get cheaper payroll, (and) they get local residents to work on their projects," Notar said.

Assembly member Bob Doll said he would like to see project labor agreements for one third to one half of the city projects. He said doing so would ensure that benefits and rights enjoyed by union workers would spread to all workers.

"It sets a standard by which everybody comes to be judged," Doll said.

The city has 20 days to respond to Shattenberg and the Associated Builders and Contractors of Alaska's first legal volley - two weeks after the bid for Harborview is due.

The builders' lawyer declined to say whether he would seek an injunction to delay the Harborview project's bid date.

Any delay of Harborview's renovations would be hard on the school district, according to Superintendent Peggy Cowan. She said school construction projects have to keep to a tight schedule because delays would disrupt entire school year calendars.

Hartle said he did not think any delay for the Harborview bid would be granted by the courts. He pointed to a similar case involving contractors and the city in 1996, where Judge H. Russel Holland denied a temporary restraining order for a city construction project that had a project labor agreement.

"This is not a situation where I find any possible irreparable harm to the plaintiffs in this case," Holland said.

(juneauempire.com)

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