Construction Issues and Labor Strikes

1. Construction Issues and Labor Strikes IASBO 60th Annual Conference May 18, 2011 Stuart L. Whitt 70 S. Constitution Drive Aurora, Illinois 60506 630-897-8875 swhitt@whittlaw.com

2. School Districts and Labor Unions • Most school districts are familiar with labor unions that • represent their teachers and support staff • represent those employed by contractors who construct or renovate facilities • represent those employed by other vendors providing labor to school districts, e.g. student transportation companies

3. Labor Unions and Construction Projects • There is no obligation to award construction projects to contractors with a unionized workforce • Illinois Law only requires that “a wage of no less than the general prevailing hourly rate…be paid to all laborers, workers and mechanics employed by or on behalf of any and all public bodies engaged in public works.” Prevailing Wage Act, 820 ILCS 130/1 • The “general prevailing hourly rate” is typically the union rate in the locality

4. Prevailing Wage Act vs. Competitive Bidding Requirements of Section 10-20.21 of the School Code • Section 10-20.21 requires school boards to award all contracts, with certain exceptions, to the “lowest responsible bidder, considering conformity with specifications, terms of delivery, quality and serviceability.” • Under the Prevailing Wage Act, the lowest responsible bidder on projects involving public works must pay the prevailing hourly rate • There is no requirement that school districts employ only union contractors • Regardless, union disputes present certain perils for your construction projects

5. Informational Picketing • In the current economic climate, construction jobs are highly coveted • Labor unions are very watchful of public projects to protect their members • If a contractor or subcontractor employs non-union workers, you can anticipate informational picketing at your job site • Informational picketing is generally directed at the public and not the employees of the non-union contractor or the employees of any other contractor servicing the job • That said, informational picketing can stop your project in its tracks

6. Impact of Informational Picketing • The project: new $75 million high school • All major trades: unionized laborers • Subcontractors: unionized laborers • Exception: athletic field bleacher subcontractor employing non-union workers, but paying prevailing wage • The result:

8. School District’s Response • Litigation: so long as the picketing can be construed as informational, educating the public about a particular contractor, you will not be successful in securing an injunction • Self-help: you can establish a “neutral gate” for contractors who are not immediately involved in the dispute • Goal: one gate for the informational picketers and another for the uninvolved contractors • Common Result: many union laborers will not cross a picket line, even through a neutral gate

9. What’s a School District To Do? • Remove the non-union contractor from the site when other unionized contractors are present; for example • Buy the non-union contractor out of his contract and replace with union labor • Can be relatively expensive but gets the project back on track • Direct the non-union contractor to perform his work during off hours when the other trades are not present • Informational picketing should stop, but if it doesn’t, then go to the NLRB

10. National Labor Relations Board • School districts are familiar with the Illinois Educational Labor Relations Board • Private employers are governed by the National Labor Relations Board (NLRB) • Pursuant to Section 8(b)(4)(B) of the NLRA it is an unfair labor practice for a labor organization to “threaten, coerce, or restrain any person” where an object is “forcing or requiring any person…to cease doing business with any other person”, among other things

11. Example of an Unfair Labor Practice • The project: summer high school renovation • All major trades: unionized laborers • Separate minor contract: non-union electric contractor • The result:

13. School District’s Response • All other contractors refused to cross the picket line, causing all work to stop • School district removed non-union contractor from the site, but union persisted in picketing • Superintendent confronted the picketers and asked them to stop their unlawful activity, but they refused • School district’s attorney wrote a letter to the union business agent demanding that the union cease and desist its unlawful activity and warned of an impending NLRB charge • Union refused

14. School District’s Response • School district filed an unfair labor practice charge against labor organization, NLRB Form 508 • Unfair labor practice charge • was filed against the local union and its business agent • cited Section 8(b)(4)(B) of the NLRA • included a clear statement of the facts • attached photos of the picketing • attached the demand letter with proof of service • was supported by an affidavit from the superintendent

15. The Result • NLRB opened a case and served notice of the charge upon the union local • NLRB pressured the local to withdraw its pickets, which the union agreed to do • Work resumed by the union contractors • Non-union contractor completed its work at night or on weekends • Had the union not withdrawn its pickets, an order from the NLRB would have followed and would serve as the basis for a court action to secure injunctive and monetary relief

16. What if a Union is on Strike?

17. The Dilemma • In July 2010 the International Union of Operating Engineers went on strike shutting down a number of projects, including at least 2 large high school renovations and expressway construction in the Chicagoland area • Given the summertime construction the start of school was in peril • 2 school districts negotiated Project Labor Agreements with the local building trades council and regional construction alliance

18. Project Labor Agreement • The parties: school district, local building trades council, regional construction alliance and contractors awarded construction work directly or indirectly by the district • The work: new construction, renovation, repair work, site work and dedicated off-site work • Term: Negotiable but 7 to 10 years is not uncommon • District has the absolute right to select any qualified bidder without reference to whether the bidder is a signatory to any labor agreement, but the bidder must become a party to the Project Labor Agreement

19. Project Labor Agreement • Advantages: • Disadvantages:

20. Questions