Unions Defy CEQA Reformers with Taunting Resolution

Despite their reputation as effective and extensive abusers of the California Environmental Quality Act (CEQA) to pursue economic objectives unrelated to environmental protection, California union leaders are strategically choosing to be vocal activists against CEQA reform.

Union leaders are obviously quite confident that corporate executives and the news media will hesitate to make them accountable for their practice.

The State Building and Construction Trades Council of California, the San Diego and Imperial Counties Labor Council, AFL-CIO, and the United Food and Commercial Workers Western States Council are an essential part of the “CEQA Works” coalition organized by the California League of Conservation Voters to oppose CEQA reform. I predict these unions will be the major funding source for broadcast advertising from CEQA Works to undermine reform proposals. (Expect advertising to run soon on these radio stations.)

On February 11, 2013, the leadership of the California Labor Federation, AFL-CIO unanimously approved a resolution stating its commitment to “protecting the critical components of CEQA that have made it effective.” It was presented by the State Building and Construction Trades Council of California.

CEQA documents for proposed solar power plants in Fresno County as of August 7, 2012. A majority of these documents related to union CEQA objections.

This resolution consists of buzz words, emotive language, and facts taken out of context. Many of the declarations provoke laughter at close examination: for example, the resolution praises union “alliances with local businesses” even though small local businesses undermine private sector unionism by operating free of union work rules and not participating in multi-employer union-administered fringe benefit programs.

(This provision probably alludes to CEQA challenges to Wal-Mart supported by the United Food and Commercial Workers union. As reported in the UFCW Local Union No. 135 newsletter of October 2012, “…pro-business politicians in the California State Senate proposed gutting CEQA, making it much more difficult for us to stop Walmart and similar big-box retailers from coming to San Diego and other places in California.”)

But the resolution also reveals that unions know the psychology of their opponents. From their experience in union corporate organizing campaigns, union leaders recognize how business executives strive to protect their professional reputations and corporate images. The resolution is a warning to any corporate executive advocating for CEQA reform who might be tempted to explain publicly why unions oppose it.

Few California corporate executives have the gumption or rhetorical skill to openly challenge an organization supporting benevolent, humanistic impulses such as “smart and sustainable development,” “public health, especially in low-income communities,” and “protecting local communities, strengthening alliances with local businesses, and promoting the creation of good jobs.”

And as an additional defense from accusations of hypocrisy, union officials strategically included a direct accusation in the resolution that “many of the attacks on CEQA are coming from the same corporations that seek to roll back regulations that protect workers.”

Who would dare to counterattack by pointing out how unions use those regulations as a strategic tool to coerce businesses into collective bargaining?

And it’s not just corporate executives intimidated by the aggressive union counterthrust. Reporters, editors, and newspaper executives who dare to expose union hypocrisy are vulnerable to accusations about poor journalistic practices and reporting of right-wing innuendo.

I sent out two Tweets to present the other side of the story:

Unions oppose #CEQA reform – delaying projects & activities is an essential part of organizing strategy in California http://www.phonyuniontreehuggers.com 

Union resolution to oppose #CEQA reform: subtly stating CEQA’s relevance to unions without detailing how unions use it http://www.calaborfed.org/index.php/site/page/1959 …

These missives were tiny beacons of common sense and fiscal responsibility jettisoned into a maelstrom of leftist commentary on Twitter, to disappear into irrelevance.

No one affirmed my comments by citing a CEQA lawsuit filed on January 22, 2013 by the new, shadowy “Fresnans for Clean Air (FRESCA)” in Fresno County Superior Court alleging that the Fresno City Council failed to adequately assess the environmental damage caused by contracting out garbage services. No one asked about the status of the CEQA lawsuit filed on December 14, 2012 by the Laborers Union (LIUNA) Local No. 783 and “Concerned Bishop Residents” in Mono County Superior Court alleging that the Mono County Board of Supervisors failed to adequately assess the environmental damage caused by an upgrade of the Mammoth Pacific Unit 1 geothermal power plant.

Unions dumped these CEQA objections at a meeting of the United Port of San Diego Board of Commissioners on September 19, 2012.

No one mentioned the notorious CEQA document dumps in May 2012 and in September 2012 by the San Diego County Building and Construction Trades Council and UNITE HERE Local Union No. 30 against the proposed San Diego Convention Center Expansion Phase 3. In November, the unions announced “settlement agreements” that failed to address almost all of their environmental objections – including rising sea levels resulting from global warming – even as the unions obtained separate labor agreements for construction and hotel and hospitality services.

One of the declarations in the California Labor Federation resolution asserts that “claims of rampant CEQA litigation are wildly exaggerated since there is an average of only 200 CEQA (sic) per year” and that “only 1% or fewer projects subject to CEQA involve litigation of any sort.” While this statistic is deceptive in many ways, it doesn’t indicate how unions slow down projects using CEQA before ever reaching the point where their law firms need to file a lawsuit. There won’t be a union-instigated CEQA lawsuit to block the San Diego Convention Center Expansion Phase 3 – the preliminary activity under CEQA was enough to win the labor agreements.

The typical tactic used by exploiters of CEQA is “document dumps,” where an attorney submits a huge stack of CEQA objections at the last possible moment, sometimes with meek apologies. As a lawyer in California said to me last week, “The unions are at the point now where they don’t even need to submit comments about Environmental Impact Reports. The union law firm sends a public records request asking for the company’s application for a permit, and the company then calls up the law firm to arrange for a Project Labor Agreement.”

The web site www.PhonyUnionTreeHuggers.com was established by the Alliance for a Cleaner Tomorrow (ACT) in 2012 to document labor union involvement in CEQA environmental objections to proposed projects. Entries are based on actual legal documents that are hyperlinked for reference. The web site also includes the following news articles to show that once in a while, the truth leaks out about union CEQA exploitation:

Protests Over Valley Solar Projects Called a Ploy” – Fresno Bee – April 29, 2012

“Labor Coalition’s Tactics on Renewable Energy Projects Are Criticized” – Los Angeles Times – February 5, 2011

“Debate Brews in California Over Unions And Power Projects” – Platt’s Electric Power Daily – October 29, 2009

“A Move to Put the Union Label on Solar Power Plants” – New York Times – June 18, 2009

“Greenmail: Independent Builders Accuse Unions of Coercion” – Central Valley Business Journal – December 2007

“Union Staffing Demands Dim Market for Solar Panels” (Op-Ed) – Los Angeles Business Journal – October 8, 2007

“Unions Wielding Environmental Law to Threaten Foes” – Sacramento Business Journal – January 29, 2006

“Suits in California Delay Wal-Mart Supercenters” – Associated Press – March 20, 2005

“Pressure by Labor Group Alleged” – Sacramento Bee – September 19, 2004

“Struggle Over Power Plants” – Los Angeles Times – September 6, 2004

“Union Group Comes Under Fire at CEC [California Energy Commission] Workshop” – Energy Newsdata’s California Energy Markets – August 20, 2004

“Roseville OKs Labor Agreement for Power Plant” – Sacramento Business Journal – July 22, 2004

“Unions Push Roseville for Power Plant Pact” – Sacramento Business Journal – July 18, 2004

“No Strong-Arming” – Sacramento Business Journal (editorial) – July 18, 2004

“Unions Have Power Over Energy Plants” – Tri-Valley Herald (San Francisco: East Bay) – March 18, 2002

“Power Grab” (Editorial) – Wall Street Journal – February 15, 2001

“Blame Unions for Blackouts” (Op-Ed) – Engineering News-Record – January 29, 2001

“Unions Play Part in Power Crisis” – Bakersfield Californian – December 23, 2000

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

California’s Unionized Construction Workforce: Surprisingly Low Rates…and Dropping

On January 23, 2013, the U.S. Department of Labor’s Bureau of Labor Statistics issued its annual Economic News Release: Union Members Summary. It announced that the overall union membership rate – the percent of wage and salary workers who were members of a union – dropped from 11.8 percent in 2011 to 11.3 percent in 2012. The rate of union workers in the private workforce was 6.6 percent in 2012, while the rate of union workers in the government workforce was 35.9 percent.  In 2012 there were more public employee union members (7.3 million) that private industry union members (7.0 million).

In the United States, 13.2 percent of construction workers belonged to a union in 2012 (with 13.7 percent represented by a union). This percentage has been declining since the late 1960s. It dropped from 14.0 percent in 2011.

A similar decline in union membership and representation is seen in the California construction workforce. In the 1960s, the construction workforce in California was overwhelmingly unionized, with official statistics indicating a unionization rate that exceeded 100% (because of statistical anomalies). But the percentage started dropping precipitously after that, as indicated by the establishment of various chapters of the non-union Associated Builders and Contractors in California in the mid-1970s.

The low percentages of unionization in the California construction industry and their decline through 2012 may be surprising to people who see significant political power for construction unions on the state and local levels of government. Here are statistics for California from 1983 to 2012 and for the San Francisco Bay Area and Los Angeles area from 1986 to 2012. 

California

Year

# of Workers

Union Members

Percentage that are Union Members

Covered by Union Agreement

Percentage Covered by Union Agreement

1983

398,031

156,189

39.2

164,233

41.3

2000

738,760

176,288

23.9

183,577

24.8

2006

1,007,227

175,828

17.5

181,604

18.0

2007

1,082,631

178,624

16.5

184,031

17.0

2008

923,815

186,994

20.2

196,386

21.3

2009

734,894

129,251

17.6

132,541

18.0

2010

707,158

110,716

15.7

116,498

16.5

2011

686,035

115,619

16.9

124,965

18.2

2012

746,875

119,015

15.9

122,449

16.4

Los Angeles-Long Beach-Riverside Metropolitan Area

Year

# of Workers

Union Members

Percentage that are Union Members

Covered by Union Agreement

Percentage Covered by Union Agreement

1986

272,836

64,392

23.6

71,653

26.3

2000

334,521

61,972

18.5

66,668

19.9

2006

499,943

79,090

15.8

81,972

16.4

2007

516,433

71,980

13.9

75,143

14.6

2008

458,099

74,017

16.2

76,700

16.7

2009

383,252

75,975

19.8

78,226

20.4

2010

356,387

56,549

15.9

58,651

16.5

2011

350,176

56,955

16.3

60,349

17.2

2012

342,007

53,826

15.7

55,027

16.1

San Francisco-Oakland-San Jose Metropolitan Area

Year

# of Workers

Union Members

Percentage that are Union Members

Covered by Union Agreement

Percentage Covered by Union Agreement

1986

139,884

72,416

51.8

72,416

51.8

2000

155,118

53,839

34.7

53,839

34.7

2006

205,208

55,579

27.1

55,579

27.1

2007

236,372

51,243

21.7

52,288

22.1

2008

229,711

70,441

30.7

70,441

30.7

2009

158,908

31,685

19.9

32,724

20.6

2010

167,332

19,623

11.7

21,776

13.0

2011

153,608

33,095

21.5

37,044

24.1

2012

179,883

31,373

17.4

32,390

18.0

 
What is stunning about these percentages is the decline in the unionized percentage of the California construction workforce during and after the collapse of the residential construction market from 2007 to 2009.

In the 2000s, residential construction was generally non-union throughout the state, and the virtual stop to residential and commercial construction should have proportionally lifted the percentage of union workers as public works and health care (types of building construction with a stronger union presence) became more dominant in the industry.

In addition, it appears that construction unions were not successful in holding or gaining market share through their political strategy of government-mandated Project Labor Agreements and their litigation strategy of exploiting the California Environmental Quality Act (CEQA) to pressure private developers into Project Labor Agreements. One can only guess at the percentage of unionization if top construction union officials did not promote and practice these strategies.

I expect someone at the University of California Miguel Contreras Labor Program will one day help the unions examine the possible causes of this unexpected trend in the California construction industry. For now, I will guess that difficult economic circumstances starting in late 2007 and early 2008 created a more competitive bidding environment (on both public works and private construction) in which unionized contractors had difficulty competing for and winning bids. Prosperous economic times (such as 2000 and 2006) seem to benefit union representation in the construction industry. At state and local government meetings in 2009, 2010, and 2011, construction union lobbyists routinely reported 25 to 35 percent unemployment rates among their membership.


The best neutral source of information regarding union density is the Union Membership and Coverage Database, available at www.unionstats.com. This is an Internet data resource providing private and public sector labor union membership, coverage, and density estimates compiled from the Current Population Survey (CPS), a monthly household survey, using U.S. Bureau of Labor Statistics methods.

Union statistics in specific metropolitan areas for private construction are found in this category: III. Metropolitan Area: Union Membership, Coverage, Density, and Employment by Metropolitan Area and Sector, 1986-2012. Two regions of California are included in this category: the San Francisco Bay Area and Los Angeles.

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

Calling for Public Sector Union Reform is Not Anti-Union

Last week an article written by UnionWatch contributor Kevin Dayton was republished in its entirety by the State Building and Construction Trades Council. While we are pleased that the SBCTC is sharing our material with their members, we object to their characterization of UnionWatch as an “anti-union website.” We also invite them to consider the greater threats to overall worker prosperity.

UnionWatch is not anti-union. UnionWatch aspires to provide information that will elevate and enlighten the public dialogue on the appropriate role for unions, especially in the public sector, with the goal of helping to foster constructive progress towards more effective and equitable state and federal laws governing unions. Here are some policy options we have explored that might make unions more relevant, accountable to their members, and beneficial to the overall economy:

Voluntary Union Membership and Voluntary Union Representation
No worker should be forced to join a union as a condition of employment, and any worker who wishes to represent themselves in their relationship with their employer should be free to do so.

Politically Neutral Public Sector Unions
Public sector unions should not be permitted to collect dues via payroll deduction, nor should they be permitted to use any portion of member dues for political activities. Government employees should not be electing their own bosses, particularly since the politicians who must manage government workforces are not required to earn a profit in a competitive market, and therefore face far less adverse consequences when they give in to union demands for unsustainable wages and benefits.

Union-Free Public Safety Agencies
Public safety unions require the most stringent reforms of all since their members not only work for the government, but are the first responders who are responsible for saving lives as well as taking lives in the interests of public safety and to enforce our laws. Unions for these classifications of government workers should be banned. Public safety workers can return to having voluntary associations that work for the betterment of their profession and the community, but allowing them to unionize disrupts the sacred and precarious trust that citizens place in first responders.

Competitive Bidding on All Public Works Projects
Public works projects should always be free to select contractors based on business principles of cost and quality. Using a union contractor should never be a condition of using public funds. Unionized contractors should be free to bid on any public works project in fair and open competition with non-union contractors.

Within these reasonable constraints, unions have a valuable role to play in America’s future. The illustrious past that are the legacy of today’s unions include 40 hour work weeks, safe working conditions, and a host of other safeguards and restraints on predatory employers that we now take for granted. Well over fifty years ago, unions won the historic battles that define them, and instead of reinventing themselves to remain a productive player in American society today, too many of them have become adjuncts to monopolies and governments, tools of economic repression of the many for the benefit of a few.

In America unions have gravitated to the sectors where there is minimal accountability because the employer can just raise taxes and borrow money. In the public sector, executives, scientists, attorneys, doctors and judges now belong to unions. This is an absurd inversion of the mission of unions. These people aren’t blue collar workers who toil in dangerous factories, they are highly educated professionals. Public sector workers can’t have it both ways. If they have higher levels of education than the general population, and deserve higher average pay and benefits as a result, then their skills must be highly marketable. They should not need unions to represent them.

The State Building and Construction Trades Council of California may have more in common than they realize with the so-called conservatives and right-wingers who they likely assume oppose them at every turn. Because the reason the SBCTC is pushing high-speed rail is not because it is the best way to invest in California’s economy. They are pushing high-speed rail because it is the ONLY massive public works project that environmentalists don’t oppose.

If private construction unions care about workers, all workers, than they should push for projects that will invest in California’s future to lower the cost of living for everyone. There are an awful lot of exciting ways to invest in California to make life easier for everyone, all workers, all consumers, all ratepayers: Upgrade roads and freeways to accommodate smart cars that drive on auto-pilot, dig new last-mile utility corridors in every city and suburb to get electricity and telecommunications cables underground, build a LNG terminal off the Central California Coast, begin on-shore slant drilling to extract oil and gas from the Monterey Shale Formation, repair and upgrade aqueducts, bridges and dams, build desalination plants off the Southern California Coast, and in general, unlock restrictions on land development in California to make real estate affordable again to ordinary workers.

To do all this, the SBCTC will need to take on the environmentalist lobby, the public sector unions, and the Wall Street Bankers who massively profit from government deficits, government pension excess, and environmentalist charades such as CO2 auctions. The SBCTC faces a stark choice. They can continue to perpetuate an economically stagnant, elitist status-quo where only select union workers make a decent living while ordinary workers struggle. Or they can be truly pro-worker and embrace a new more competitive role for themselves in the 21st century. They can recognize the true threat to worker prosperity – global bankers and environmentalists who want to auction CO2 emissions permits to enrich themselves, allied with public sector unions who will channel their cut of the proceeds into funding their own payrolls. Focusing on this futile nonsense happens at the expense of the far more beneficial infrastructure projects noted above, and it crushes average consumers and ordinary workers.

It is not anti-union to explore ways to right-size and reform unions, nor is it pro-worker to advocate high-speed rail when there are so many better ways to invest in California’s future.

Charter Proposals for California Cities Continue Provoking Union Opposition

California Governor Jerry Brown claimed in his State of the State address that California now has “a solid and enduring budget.” His Finance Department even predicts state budget surpluses.

Despite the jubilation at the state capitol inspired by tax increases and one-party rule, California cities seem skeptical, as shown by their continued efforts to exercise their state constitutional rights to govern their own municipal affairs, free of costly and burdensome state mandates. And unions remain determined to undermine them.

The elected council of the Central Coast city of Arroyo Grande has appointed a committee to determine if it should ask voters to approve a home-rule charter, and union officials are interfering through “stiff opposition.” The elected council of the Central Coast city of Buellton is going to hold a workshop on a proposed charter, as union officials fight the proposal there too.

Meanwhile, on January 22, 2013, the Newport Beach City Council voted 7-0 to exercise its home-rule power as a charter city to establish its own policy concerning government-mandated construction wage rates (so-called “prevailing wages”). See the text of the resolution below.

RESOLUTION NO. 2013-6

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH EXEMPTING LOCALLY FUNDED PUBLIC WORKS PROJECTS FROM PREVAILING WAGE

WHEREAS, the California prevailing wage law requires contractors on public works projects to be paid the general prevailing rate of per diem wages for work of a similar character in the locality in which the work is performed;

WHEREAS, under the California Constitution, Article XI, Section 5, the laws of charter cities supersede state law with respect to municipal affairs of the city;

WHEREAS, the California Supreme Court has held that the wage levels of workers constructing locally funded public works are a municipal affair, and therefore a charter city’s prohibition on the payment of prevailing wage supersede state law; and

WHEREAS, the City of Newport Beach (“City”) is incorporated as a charter city, and thus the City may exempt locally funded public works projects from prevailing wage to conserve the City’s limited resources.

NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows:

SECTION 1: The City of Newport Beach exempts locally funded public works projects from prevailing wage, unless: (1) prevailing wage is compelled by the terms of a federal or state grant or is otherwise funded from a source that requires prevailing wage; (2) the public work is a matter of statewide concern; or (3) the payment of prevailing wage is separately authorized by the City Council, because the project is of a complexity and nature that the public interest would be served by requiring prevailing wage.

SECTION 2: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution.

ADOPTED this 22nd day of January, 2013.

The January 22, 2013 staff report to the Newport Beach City Council recommended that it establish its own government-mandated construction wage rate policy:

…the City of Newport Beach, as a charter city, is not required to pay prevailing wage for locally funded public works projects. The City may adopt either an ordinance or a resolution to affirm its municipal autonomy and conserve valuable financial resources by exempting itself from the prevailing wage requirement for locally funded public works contracts. In the absence of an ordinance or resolution, the City may exempt itself from the payment of prevailing wage through the insertion of language into individual contracts (i.e., creation of an “actual conflict” through explicit contract terms). However, to ensure consistency staff recommends the adoption of the attached resolution. The attached resolution provides an exemption for public works projects, unless: (a) prevailing wage is compelled by the terms of a federal or state grant, or other funding source; (b) the public work is a matter of state-wide concern; or (c) the payment of prevailing wage is separately authorized by the City Council due to a project’s complexity or nature that the public interest would be served by requiring prevailing wage” to the third type of project for which the City might wish to pay prevailing wage.

Before the vote, the city attorney pointed out that the state’s definition of “public works” is ridiculously broad and recommended that the city council ensure flexibility and adopt a policy to “opt-in” to state-mandated construction wage rates. Councilman Michael Henn had the courage to state publicly that “prevailing wage” is a unique “anachronism of the construction industry” and noted that most business in America is done without government-mandated prevailing wage rates.

Study Session: Applicability of Prevailing Wage to City Projects

As a prelude to the agenda item, the Newport Beach City Council convened earlier in the day for what the city attorney described as a “fairly long study session” (Discussion Regarding the Applicability of Prevailing Wage to City Projects) to discuss exercising its right as a charter city to establish its own policy concerning government-mandated construction wage rates (so-called “prevailing wages”) on purely municipal construction projects.

A leader of the Los Angeles/Orange County Building and Construction Trades Council [no web site] led off the public comment by showing a professionally-produced video called “Right the First Time” that promotes state prevailing wage laws through anecdotes and interviews with union-backed politicians. It neglects to mention the state’s absurd methods of calculating prevailing wage and defining public works. In addition, the video claims that prevailing wages are set by the free market, even though California Labor Code Section 1773 directs the state to set prevailing wage rates based on the applicable union collective bargaining agreements.

Other speakers represented union-affiliated groups such as Smart Cities Prevail and unionized construction trade organizations such as the Fire Sprinkler Advisory Board of Southern California, the Western Wall & Ceiling Contractors Association, the National Electrical Contractors Association (NECA) – Orange County Chapter, and the Western Steel Council. A few unionized contractors (locked into multi-year collective bargaining agreements) also spoke in defense of state-mandated construction wage rates.

Evening Meeting: Unanimous Approval of the Resolution

At the evening meeting, a collection of union representatives, unionized construction trade associations, and unionized contractors once again asked the city council to keep state-mandated construction wage rates. They again cited the usual union arguments about cheap, unskilled, out-of-town labor by uninsured and unlicensed contractors.

Notice how this letter from the National Electrical Contractors Association (NECA) says that quality construction requires “living wages and benefits,” as if the alternative to state-mandated construction wage rates is the California minimum wage of $8.00 per hour. Actually, state-mandated prevailing wages are typically four to six times higher than “living wage” rates set by local governments. For example, the “living wage” for the City of Irvine (in Orange County, near Newport Beach) is currently $13.13 per hour including benefits. The median wage (not including benefits) for an electrician in Orange County is $27.15, according to the California Economic Development Department. But the state-mandated total straight time “prevailing wage” for an inside wireman electrician in Newport Beach is $54.83 per hour, including fringe benefit payments and payments to “other” trust funds that do not directly benefit the employee.

A staff representative of Smart Cities Prevail (a union-affiliated labor-management cooperation committee) argued against the resolution, claiming the policy could result in economic “uncertainty and insecurity.” A representative of the unionized Fire Sprinkler Advisory Board of Southern California noted that prevailing wage contractors offer quality. A leader of the Los Angeles/Orange County Building and Construction Trades Council encouraged the city council to continue requiring its contractors to abide by the state-mandated wage rates and warned of cheap labor from out of the area. A representative of the National Electrical Contractors Association (NECA) claimed that construction workers are “part-time workers” that work eight months a year and don’t get vacations or sick days. A union contractor said “we can afford it in Newport Beach” and noted many sections of the California Labor Code would be nullified. Also speaking against the policy was a union-oriented consultant formerly involved with labor relations for the Bay Area Chapter of the Sheet Metal & Air Conditioning Contractors National Association (SMACNA).

All that needs to be said in response: In 2012, the City of Newport Beach entered into a $5,880.00 maintenance contract for “abatement of algae around the Grand Canal beaches of Balboa Island” that included the requirement for the contractor to pay state-mandated construction wage rates (prevailing wage). Is it really the business of the state legislature to impose such a requirement on the City of Newport Beach for $6000 in algae clean-up?

News Coverage of Newport Beach City Council Vote:

Newport Triggers Dock-Fee Increases, Cost-Saving Labor Contracts – Orange County Register – January 23, 2013

City Eschews Prevailing Wages: The City Council voted to exempt Newport Beach from a state requirement that compels cities to pay workers prevailing wages – Newport Beach/Corona Del Mar Patch – January 24, 2013.)

Council Closes Book on Dock Fee Increases (In other business…) – Newport Beach/Costa Mesa Daily Pilot – January 23, 2013

For More Information:

Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? – 3rd Edition

List of California’s 121 Charter Cities

California Supreme Court Affirms State Prevailing Wage Requirements Do Not Apply to Charter Cities – League of California Cities – July 2, 2012

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

Unions Await Fantastic Return on High-Speed Rail Political Investments

It’s a heady time to be a top construction union official in California, as the California High-Speed Rail Authority presumably now holds proposals from as many as five design-build consortiums to build the first segment of the $68 billion project.

If this project moves forward, it will become part of the pantheon of huge American infrastructure projects that unions cite when they brag about the lasting accomplishments of union labor. And unions can also claim an essential role in the politics behind its advancement.

Even before Californians had a chance to vote directly on funding for High-Speed Rail, union-affiliated labor-management cooperation committees made massive campaign contributions to stop statewide ballot initiatives in the mid-2000s that would have given property owners stronger rights against the government’s power of eminent domain, as a result complicating the High-Speed Rail Authority’s land acquisition plans.

For example, the State Building & Construction Trades Council Labor Management Cooperation Trust contributed $1 million in 2006 to the campaign to defeat Proposition 90, a statewide ballot measure to strengthen property rights. And in the spring of 2008, the California Construction Industry Labor-Management Cooperative Trust contributed $250,000 to this No on 98/Yes on 99 campaign committee to oppose another statewide ballot measure to protect property rights.

These two union-affiliated committees are authorized under the obscure Labor-Management Cooperation Act of 1978, a federal law signed by President Jimmy Carter and implemented by the Federal Mediation and Conciliation Service. There are no federal or state regulations specifically addressed toward these trusts, and these trusts do not have any reporting requirements to the U.S. Department of Labor’s Office of Labor-Management Standards. Unions use these trust funds routinely now to fund campaigns for and against state and local ballot measures in California. 

When Proposition 1A was on the November 2008 ballot asking California voters to authorize borrowing $10 billion for the high-speed rail project by selling bonds, unions provided a substantial portion of the campaign funding. Leading the charge was the California Alliance for Jobs, another labor-management cooperation committee authorized under the Labor-Management Cooperation Act of 1978.

As shown in the Operating Engineers Local 3 Northern California Master Agreement (page 42) and the Northern California District Council of Laborers Master Agreement (pages 14, 26), construction companies belonging to various business trade associations must pay an amount to the California Alliance for Jobs trust based on the number of hours worked by each employee represented by the union. These amounts are incorporated into the state-mandated construction wage rates (so-called “prevailing wages”) as part of the “Other” category of payments. This ambiguous category of employer payments was implemented as California Labor Code Section 1773.1(a)(7-9) when Governor Gray Davis signed Senate Bill 868 in 2003.

Through contributions, a $100,000 loan, and in-kind/non-monetary gifts, the California Alliance for Jobs was able to assist the campaign to pass Proposition 1A with $616,500, comprising 23% of the total amount raised by Californians for High Speed Trains – Yes on Proposition 1A – A Coalition of Taxpayer, Business, Environmental and Labor Groups and People from Across California Tired of Being Stuck In Traffic.

The national headquarters and the Northern California and Southern California locals of the Operating Engineers union combined for another $575,000, the Laborers union chipped in $100,000, and the State Building and Construction Trades Council of California gave $75,000. 

Top Ten Contributors to the Main Campaign Committee to Pass Proposition 1A (Includes Loans and Non-Monetary/In-Kind Contributions)

1

California Alliance For Jobs Rebuild California Committee

Union-Affiliated Labor-Management Cooperation Committee

$616,500

2

International Union of Operating Engineers Construction Union

$250,000

3

Operating Engineers Local Union No. 3 (Union & PAC) Construction Union

$250,000

4

Professional Engineers in California Government (PECG) Public Employee Union

$183,493

5

California State Council of Laborers Construction Union

$100,000

6

Parsons Brinckerhoff Americas Inc. Construction Design & Engineering

$76,500

7

AECOM Tech Corporation Construction Design & Engineering

$75,000

8

International Union of Operating Engineers Local No. 12 Construction Union

$75,000

9

Members Voice of the State Building Trades Construction Union

$75,000

10

HNTB Corporation Construction Design & Engineering

$63,000

Union involvement in pushing the high-speed rail wasn’t over with the 2008 election. In 2010 and 2011, when the California High-Speed Rail Authority was stumbling under a confused business plan and skyrocketing cost estimates, the head of the State Building and Construction Trades Council of California and regional building trade unions submitted commentaries to newspapers defending the planned rail program. And as appointees to the Board of Directors of the California High-Speed Rail Authority, the head of the State Building and Construction Trades Council of California and a representative of the Operating Engineers union kept the votes coming to move the project forward.

Now the unions get the rewards. Section 7.11.3 of the Request for Proposal for Design-Build Services for the first segment of the California High-Speed Rail project stated that “Proposers are advised that, subject to FRA [Federal Railroad Administration] approval, the Authority intends to develop a Community Benefits Agreement consistent with the Community Benefits Policy adopted by the CHSRA [California High-Speed Rail Authority] Board at its December 6, 2012 meeting with which the Contractor will be required to comply.”

And Section 10.1 of the Request for Proposal states that “The Authority [that is, the California High-Speed Rail Authority CEO Jeff Morales] will not make a recommendation for award of the Contract [to the California High-Speed Rail Authority Board of Directors] unless the successful selected Proposer has submitted the following…A letter of assent executed by the Proposer agreeing to be bound by the Community Benefits Agreement.”

This “Community Benefit Agreement” is commonly known as a “Project Labor Agreement.” In fact, a “draft” Project Labor Agreement is included as Addendum 8 in the High Speed Rail Authority’s bid documents for the Request for Proposal. (See my comprehensive analysis of the union “Community Benefits Agreement” for the California High-Speed Rail and the subsequent rebuttal from the Building and Construction Trades Department, AFL-CIO national headquarters.)

For construction unions, California’s High-Speed Rail project will yield a fantastic long-term return for their political investment. It remains to be seen if taxpayers see any worthwhile returns on their “investment” in paying for it.

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

Watch Union Official’s Rude Antics at California High-Speed Rail Conference

On January 11, 2013, a video camera recorded a stunning public tirade by Fresno’s top construction union official at a conference about supposed local contracting opportunities for the first segment of California’s High Speed Rail. Below is video footage of the beginning of a panel discussion about Project Labor Agreements, and below that is the ignominious ending of the panel discussion a few minutes later.

The incident exposes the coercive power of special interest groups behind the California High-Speed Rail Authority’s quest to slice the first segments of this rail corridor through the San Joaquin Valley, located in the middle of the planned route between San Francisco and Los Angeles. It also compromises the California High-Speed Rail Authority’s relentless public relations program to portray the high-speed rail to coastal urbanites as a progressive, visionary plan to save the planet.

An effective public relations campaign depends on major news media focusing on idealistic concepts, rather than the coarse ground game related to which people from which places get the jobs to perform the actual construction. But while idealistic concepts for environmental sustainability are promoted by professional activists who work for non-profit environmental and public transit advocacy organizations, building the high-speed rail requires construction trade workers. This injects union officials from the San Joaquin Valley into the coalition to build the rail line. And one of those union officials tarnished the progressive image on January 11.

Background: Why Will Unions Get a Monopoly on Building California’s High-Speed Rail?

Construction trade unions have long planned to use the government as its agent to monopolize the building of high-speed rail, now estimated by the California High-Speed Rail Authority to cost $68.4 billion. It seemed probable (but not guaranteed) that union workers that specialize in heavy industrial infrastructure construction would end up building the rail line itself. However, the stations and other building infrastructure would be prime bidding targets for Northern California’s productive and efficient non-union contractors. And unions do not want another failure similar to their failed plot ten years earlier to win a Project Labor Agreement to build the new University of California campus in Merced.

That plan – backed by Governor Gray Davis – was undermined in 2001 and 2002 by San Joaquin Valley business, political, and community leaders, who worked with some aggressive construction business associations to expose and criticize the scheme. In the end, bidding was done under fair and open competition, and non-union contractors and their non-union employees were prominent in building the new campus.

This time, things are different. Unions provided campaign support to pass Proposition 1A (the “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century”) in November 2008. The head of the State Building and Construction Trades Council of California was appointed to the High-Speed Rail Authority Board of Directors, along with an official for the Operating Engineers Local Union No. 3, which represents operators of cranes, excavators, and other construction equipment.

So it shouldn’t be a surprise that Section 7.11.3 of the Request for Proposal for Design-Build Services for the first segment of the California High-Speed Rail project states that “Proposers are advised that, subject to FRA [Federal Railroad Administration] approval, the Authority intends to develop a Community Benefits Agreement consistent with the Community Benefits Policy adopted by the CHSRA [California High-Speed Rail Authority] Board at its December 6, 2012 meeting with which the Contractor will be required to comply.” (Note: “Community Benefits Agreement” is a euphemism for “Project Labor Agreement” meant to give the public a nice warm feeling about a union sweetheart deal.)

And Section 10.1 of the Request for Proposal states that  “The Authority [that is, the California High-Speed Rail Authority CEO Jeff Morales] will not make a recommendation for award of the Contract [to the California High-Speed Rail Authority Board of Directors] unless the successful selected Proposer has submitted the following: Escrowed Proposal Documents and corrected any deficiencies identified by the examination of the EPDs, and A letter of assent executed by the Proposer agreeing to be bound by the Community Benefits Agreement.” This indicates a government-mandated Project Labor Agreement.

California High Speed Rail Project Labor Agreement Mandate - Section 10.1

California High Speed Rail Project Labor Agreement Mandate – Section 10.1

In addition, the California High-Speed Rail Authority arranged the bidding process on the first segment of the High-Speed Rail (from Madera through Fresno) so that the five prequalified design-build construction consortiums are obligated to sign a Project Labor Agreement with the State Building and Construction Trades Council of California in order to be competitive. This subtlety is possible because the High-Speed Rail Authority is authorized to select the winning bidder using a somewhat subjective scoring system based on “best value” procurement criteria.

On December 6, 2012, the California High-Speed Rail Authority voted for a policy resolution that established generalized “community benefits” that contractors would have to demonstrate as a result of building the high-speed rail through the Central Valley. Not surprisingly, these same benefits are cited in the union Project Labor Agreement that is now included as a “Community Benefits Agreement” in Addendum 8 of the bid documents for the first segment of the high-speed rail. In order to maximize the score for community benefits, the contractor simply agrees to the Project Labor Agreement, and then everyone will feel good that ‘Needy’ Workers Will Get Jobs on High-Speed Rail.

For technical details about the provisions of this Project Labor Agreement, see my comprehensive, 4000-word Analysis of the Phony Community Benefits and Other Provisions in the Union Project Labor Agreement for the First Segment of California’s High-Speed Rail.

Unexpectedly Defiant Resistance to the Project Labor Agreement Provokes Union Anger

A panel discussion about the draft Project Labor Agreement for the construction of the first segment of the California High-Speed Rail was scheduled for 1:30 p.m. on Friday, January 11, 2012 during the 6th Annual San Joaquin Valley Region Public Contracting / Central Valley High Speed Rail Conference / Expo (Jobs & Contracts) at the Downtown Fresno Radisson Hotel & Convention Center. The panel moderator was Kathleen Ellis Faulkner, a Bakersfield attorney.

Three invited panelists showed up: John Hutson, Secretary-Treasurer of the Fresno, Madera, Kings and Tulare Counties Building and Construction Trades Council (this organization lacks a web site), Eric Christen of the Coalition for Fair Employment in Construction (a Project Labor Agreement opponent), and Nicole Goehring of the Northern California Chapter of Associated Builders and Contractors (another Project Labor Agreement opponent). As you hear in Video #1, organizers of the panel discussion had asked other union officials to participate (some apparently chose instead to sit in the audience).

As shown in Video #1, Hutson was flummoxed to find out he would be defending the unions’ Project Labor Agreement instead of explaining to the construction companies of the Central Valley how they would soon enjoy the benefits of unionization under the Project Labor Agreement if they hoped to work on the High-Speed Rail. He expresses his astonishment that “some little kid” was handing out information from Associated Builders and Contractors about Project Labor Agreements. He then proceeds to tell a colorful story from “when he was a small boy” about farm life.

None of this has anything to do with the terms and conditions of Project Labor Agreements in bid specifications for construction contracts, and Video #2 shows what happened when an effort was made by the moderator to get the panel discussion on track.

Hutson complains that Eric Christen is “edging it on” and “smiling it up.” (Did he mean “egging it on?”) He then says to Christen, in defiance of social norms of respect for other people as promoted by the White House and the U.S. Department of Labor, “I think I recognize you from before your sex change operation.”

The moderator tries to take the microphone away and restore order, but Hutson resists: “get your hands off.” Then he walks away from the table, only to return to spit out some profanity (specific words heard by witnesses but not quite audible on Video #2). He then storms out of the room (and the hotel) with his fellow union officials, leaving the contractors sitting in the room stunned at the personal attacks and derogatory statements launched during the five-minute panel discussion.

A press release jointly issued on January 11, 2013 by the Coalition for Fair Employment in Construction and Associated Builders and Contractors quoted a Fresno-based construction company owner who attended the panel discussion:

I took time away from my workday to be here to discuss this important issue on behalf of my employees that prefer to work in a merit shop environment. The antics displayed today represent the reason why I left the Union many years ago. The taxpayers and voters of California should be deeply concerned about the union favoritism displayed in this agreement.

In November 2008, 52.7% of California voters supported Proposition 1A, called the “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century.” How many of them assumed that the 21st Century would involve these kinds of union antics?

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

California’s “Prevailing Wage” – Floor Vacuuming at $45.93/Hour

California State Assemblyman Curt Hagman (R-Chino Hills) is introducing a bill to address one of the numerous absurdities in California’s prevailing wage law: the $38-46 per hour wage paid to laborers who clean up construction sites after taxpayer-funded construction is finished.

As revealed in a 2009 state wage enforcement action against a construction company working under a contract in the Antelope Valley Union High School District in Los Angeles County, such work entails “vacuuming, dusting, cleaning and polishing windows, walls and floors.”

Some Californians might consider $12 per hour to be a reasonable wage for this low-skill work, especially when so many school districts are funding massive building programs with borrowed money, thus taking on a staggering amount of debt for future taxpayers. Is it wise fiscal management for school districts to sell Capital Appreciation Bonds with outlandish compound interest payments in order to pay $45 per hour for someone to push a vacuum?

And in fact, the state does recognize a wage rate at about $12 per hour for janitorial work. California Public Utilities Code Sections 465-467 require public utilities to pay prevailing wage rates for labor of a custodial or janitorial nature, and therefore the California Department of Industrial Relations determines wage rates for this kind of work.

How Does California Now Determine Mandated Wage Rates for Construction Cleanup?

But vacuuming up the lingering sawdust at a construction site is considered a construction trade, because such work is classified within the work assignments listed in the applicable collective bargaining agreements of the Laborers Union.

Under Section 1773 of the California Labor Code and Title 8, Subchapter 3 of the California Code of Regulations, the State of California determines “prevailing wage” rates in most cases by obtaining the union collective bargaining agreements for each trade in each geographical region of the state, adding up all of the payments indicated in these agreements, and declaring the total to be the “prevailing wage.”

Wage rates include fringe benefits and employer payments to “other” funds that do not directly benefit the employee. And the same wage for the same work applies to non-union workers.

For Southern California, the Department of Industrial Relations sets the total straight time hourly “prevailing wage” for a journeyman in the Group 1 classification of “Laborer, General Cleanup” at $45.93.

This amount is based on the following payments in the collective bargaining agreement negotiated between the Southern California District Council of Laborers and three contractor associations – Associated General Contractors (AGC) of California, Building Industry Association (BIA) of Southern California, and the Southern California Construction Association:

  • $28.09 in basic wages
  • $6.81 to the union health and welfare program
  • $6.00 to the union pension program
  • $3.90 to the union vacation and holiday program
  • 64 cents to the union apprenticeship program
  • 49 cents for “other” payments that go to a variety of union-managed funds not for the direct benefit of the employee.

For Northern California, the state-mandated total straight time hourly “prevailing wage” rate for a journeyman in the Laborers Group 4 trade classification applies to the following:

Final cleanup on building construction projects prior to occupancy only. Cleaning and washing windows (new construction only), service landscape laborers (such as gardener, horticulture, mowing, trimming, replanting, watering during plant establishment period) on new construction.

The total straight time hourly wage for that classification is $39.02 in the San Francisco Bay Area and $38.02 in other counties of Northern California. These amounts are based on the collective bargaining agreement negotiated between the Northern California District Council of Laborers and Associated General Contractors (AGC) of California.

In San Diego County, the state-mandated total straight time hourly “prevailing wage rate for a journeyman in the Group 1 classification of “Laborer, General Cleanup” for commercial building is $43.27. This amount is based on the collective bargaining agreement negotiated between the Southern California District Council of Laborers for San Diego County and Associated General Contractors – San Diego Chapter.

What Are the Chances of Establishing a Reasonable State-Mandated Wage Rate for Construction Cleanup?

If you were an official or lobbyist for the Laborers Union in California or for the State Building and Construction Trades Council of California, would you give permission to Governor Jerry Brown and the Democrats in the legislature to undercut the high wage rates that your union negotiated with union contractors for “vacuuming, dusting, cleaning and polishing windows, walls and floors?” Of course not!

In negotiating their collective bargaining agreements, construction trade unions actually enjoy a kind of quasi-regulatory authority, because their final agreements are the basis for the state-mandated construction wage rates. They are loath to compromise this power.

In the 2011-12 state legislative session, Assemblywoman Shannon Grove (R-Bakersfield) introduced Assembly Bill 987, a comprehensive and technically-precise bill that would have reformed the state’s calculation of prevailing wages so that state-mandated construction wage rates are reasonably accurate and based on actual local market conditions. The Assembly Labor and Employment Committee rejected the bill on a party-line vote: Republicans in support, Democrats opposed.

Regarding the specific wage rate for construction cleanup, taxpayers could adopt several strategies in addition to Assemblyman Hagman’s legislation in order to prod the California Department of Industrial Relations to determine a reasonably-accurate state-mandated wage rate for “vacuuming, dusting, cleaning and polishing windows, walls and floors.” But unions will resist any challenge to the status quo, unless they exercise their own power to negotiate and accept a special construction cleanup classification – with more common sense wage rates – in their own collective bargaining agreements.

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.