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Construction Contractors Not Required to Sign Project Labor Agreement

Sep 1, 2007 12:00 PM

The National Labor Relations Board (NLRB) recently found that labor unions and the owner of an upcoming project cannot lawfully agree to require the owner's construction contractor to sign a project labor agreement (PLA). In a case stemming from one such agreement between the unions representing the construction craft workers in an area of New York and Indeck Energy Services Inc.'s Corinth Energy Center, Corinth, N.Y. — a private company that designs, owns, and operates power cogeneration facilities — the NLRB ruled that because it constitutes an implicit agreement by Indeck not to do business with another person — specifically, any contractor who would subcontract to nonunion subcontractors — the agreement violates Section 8(e) of the National Labor Relations Act and constitutes as engaging in unfair labor practices. The NLRB's decision, “Glen Falls Building and Construction Trades Council,” 350 NLRB No. 42 (July 31, 2007), states that the union “wanted a labor monopoly at a major construction site” and the owner's primary “purpose was to remove the threat of union opposition to its efforts to secure regulatory approval of its cogeneration plans.”

In its decision, the NLRB states that the New York unions did not have a collective bargaining relationship with the project owner, as the unions represented none of the owner's employees, and the owner employed none of the unions' members.

The Associated General Contractors of America (AGC), which represents thousands of both open-shop and union contractors, was the only trade association to file a friend-of-the-court brief with the NLRB. “This is extremely good news for both open-shop and union contractors,” says Stephen E. Sandherr, chief executive officer of AGC. “The decision will reduce the top-down pressure on open-shop contractors to change their labor policy, without regard to either their rights or their employees' preferences. It will also protect the collective bargaining process, and the union contractors committed to that process, making it far more difficult for labor unions to bypass the companies actually employing their members, and to negotiate, instead, with project owners.”

AGC emphasizes that “direct negotiations between construction unions and the employers of their members” are critical to the success of collective bargaining, and have enabled construction unions and such employers “to standardize work rules and other practices.”

For the full text of the decision and order, visit the NLRB's Web site at http://www.nlrb.gov/research/decisions/board_decisions/template_html.aspx?file=http://www.nlrb.gov/shared_files/Board%20Decisions/350/v35042.htm&size=255 or download the document in PDF format at http://www.nlrb.gov/shared_files/Board%20Decisions/350/v35042.pdf.

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