Judicial Council of California Imposes Project Labor Agreement on San Diego Courthouse
Excerpts from four documents (obtained from California’s Administrative Office of the Courts on June 5, 2013 through a public records request) reveal the successful behind-the-scenes plot within the California court system involving top staff of the Administrative Office of the Courts and the Judicial Council to give construction trade unions monopoly control of the $586 million new San Diego County Central Courthouse with a Project Labor Agreement. Although the Judicial Council claims to have “a comprehensive process for soliciting, gathering, and considering public comment on proposals during the policy development process,” the hasty internal process of deciding to negotiate, negotiating, and executing a Project Labor Agreement was not included on the last meeting agenda of the Judicial Council on April 25-26, 2013.
This labor pact will cut competition and raise costs for the benefit of unions. For example, see the 2011 study from the National University System Institute for Policy Research in San Diego entitled Measuring the Cost of Project Labor Agreements on School Construction in California.
How do taxpayers in the San Diego region feel about fair and open competition versus Project Labor Agreements? We know from actual votes.
- In June 2012, 56% of voters in the City of San Diego approved Proposition A to prohibit government-mandated Project Labor Agreements on city projects.
- In November 2010, 76% of voters in the County of San Diego approved Proposition A to prohibit government-mandated Project Labor Agreements on county projects.
- In June 2010, 56% of voters in the City of Chula Vista (the second most populous city in San Diego County) approved Proposition G to prohibit government-mandated Project Labor Agreements on city projects
- In June 2010 54% of voters in the City of Oceanside (the third most populous city in San Diego County) approved Proposition K, a charter that included an explicit provision to prohibit government-mandated Project Labor Agreements on city projects.
Citizens in the San Diego region – the region to be served by this courthouse – clearly do not support govenment-mandated monopolies on taxpayer-funded construction. No wonder the Project Labor Agreement was arranged by the head of the Sacramento-based State Building and Construction Trades Council of California rather than locally in San Diego.
At least everyone now knows not to waste money filing a lawsuit in the California court system challenging a government-mandated Project Labor Agreement. Would judges favor unions for construction contracts in their own system while denying this kind of deal to other government entities? Obviously lawyers for unions will now and forever launch their arguments by pointing out that the California court system itself requires its construction contractors to sign a Project Labor Agreement with unions as a condition of winning a job.
The story was first revealed in the UT San Diego (San Diego Union-Tribune) in its June 7, 2013 article Courthouse to Be Built Under Labor Pact. The UT San Diego (San Diego Union-Tribune) then posted an editorial on June 9, 2013 entitled Public Safety Loses, Labor Wins at New Courthouse.
Also, see my blog post about this Project Labor Agreement in the context of the larger Senate Bill 1407 courthouse construction program at Union Quest for Project Labor Agreements from Judicial Council of California and Administrative Office of the Courts Succeeds with San Diego County Central Courthouse.
Excerpts from the four actual documents explain the plot. (Note: one of them is “Confidential.”)
1. March 22, 2013 Memorandum to Curt Child, Chief Operating Officer from Ray Polidoro, Manager, Judicial Branch Capital Program Office, Subject: New San Diego Central Courthouse RE: Project Labor Agreement
The State Building and Construction Trades Council has asked the Administrative Office of the Courts to consider using a Project Labor Agreement (PLA) on the construction for the New San Diego Central Courthouse Project (the Project)…The JBCP is requesting that Justice Hill, as chair of the Court Facilities Working Group, review the use of a PLA on the Project. The following provides a definition and some background on PLAs…
There is variation among the provisions in PLAs, but generally they contain two key components. The first involves how labor disputes will be handled. Contractors who are party to PLAs agree not to lock out workers from worksites. In turn, the construction trade unions agree to not strike or disrupt the construction…
The second core component found with PLAs involves who will be hired and the conditions of their employment. Signatories to these agreements recognize labor unions as the exclusive bargaining representative for all project workers. Most PLAs require workers on the project to pay union dues, regardless of their membership status, and that contractors make payments on behalf of all their workers to union-affiliated fringe benefit trust funds during the course of the project.
In the debate over the use of PLAs, one of the most prominent areas of disagreement is whether these agreements affect construction costs…Opponents argue that PLAs increase costs. They claim that the requirements imposed by PLAs discourage nonunion contractors from bidding on projects and subcontractors from participating. This reduced competition could result in overall higher bids. Opponents also claim that the work condition rules required in PLAs increase labor costs and that these are passed onto the projects (sic) owner.
Rudolph and Sletten, the CM@Risk for the Project, has done several PLAs and as a result can leverage their knowledge and relationships in structuring favorable terms for a PLA to contain costs.
2. April 4, 2013 letter from Curtis L. Child, Chief Operating Officer, Judicial Council of California Administrative Office of the Courts to Dan Dolinar, Executive Vice President, Chief of Operations, Rudolph and Sletten – CONFIDENTIAL
The Court Facilities Working Group Executive Committee provided direction to AOC staff to amend the R&S agreement to require R&S to negotiate a PLA specific to the San Diego Project and to be signatory to the agreement with the trades. R&S and AOC will jointly participate in the negotiations with the State Building and Construction Trades Council of California (Trades Council).
Representatives of the Trades Council will participate in the negotiations. Other unions may also participate in the negotiations. Although the AOC is sensitive to the Trades Council’s expectations, the AOC and R&S will negotiate favorable PLA terms to minimize the potential for any construction cost increase. The negotiations and execution of a PLA by Rudolph & Sletten and the trades must not delay bidding on the San Diego Project. If an agreement between the parties is not reached by April 30, 2013, a PLA will not be required on this project.
If the PLA negotiations are successful, only R&S and the trades will be party to the PLA. For the PLA to become effective, though, all of R&S’s trade contractors over a minimum contract amount will be required to execute a letter of assent, agreeing to be bound by the PLA. The AOC will prepare necessary revisions to the current AOC I R&S Agreement to incorporate the PLA. The PLA will have to be part of R&S’s prequalification packages that R&S plans to send to its trade contractors in the beginning of May 2013.
The AOC has contacted representatives of the Trades Council and set up the first negotiation session to be in Sacramento at the State Building and Construction Trade Council office at 1225 8th Street, Suite 375, Sacramento, CA 95814 on April 12, 2013, 9:00am to 12:00pm and any additional sessions to be determined.
Thank you for R&S’s continued cooperation to incorporate a PLA into R&S’s contract and into this San Diego Project…
3. April 5, 2013 letter from Curtis L. Child, Chief Operating Officer, Judicial Council of California Administrative Office of the Courts to Robbie Hunter, President, State Building and Construction Trades Council of California
This letter is to confirm that the Administrative Office of the Courts (AOC) has agreed to meet with you and Ray Van Der Naught (sic) , the attorney for the State Building and Construction Trades Council (Council), at the Council’s office on April 12, 201 3 from 9 a.m. to noon for the purpose of negotiating a Project Labor Agreement (PLA) for the San Diego New Central Courthouse Project (San Diego Project)… I look forward to seeing you on April 12 and to fruitful discussions among the Council, R&S, and the AOC.
4. May 8, 2013 email from Steven Jahr to the Judicial Council of the Administrative Office of the Courts
From: Jahr, Steven (Administrative Director of the Courts for California)
Sent: Wednesday, May 08, 2013 11:54 AM
To: AOC JC Members Only
Cc: Bocchicchio, Michael; Byrd, Donald; Capozzi, Anthony; Castellanos, Stephan; Chang, Steven; Cooper, Hon. Candace D.; Davis, Keith D.; Feng, Hon. Samuel; Foiles, Robert D.; Fowler-Bradley, Melissa; Highberger, William; Hill, Brad; Hirschfeld, Burt; Ignacio, Donna; Jacobs-May, Hon. Jamie A.; Johnson, Jeffrey W.; Lucas, Hon. Patricia M.; Magnusson, Chris; Masunaga, Laura; Miessner, Leslie; Nash, Stephen H.; Olivas, Noema; Orozco, Hon. Gary R.; Power, David; Quinn, Kelly; Robinson, Akilah; Romero-Soles, Linda; Ruano, Teresa; Spikes, Larry; Stinson, Kevin; Toppenberg, Val; Trentacosta, Robert J.; Warwick, Thomas; Willoughby, Lee
Subject: San Diego Central Courthouse Project
Members of the Judicial Council:
I want to make you aware of a pending announcement by the State Building and Construction Trades Council of California regarding a Project Labor Agreement (PLA) with our selected contractor (Rudolph and Sletten, Inc.) for construction of the new Central Courthouse project for San Diego, the state’s largest courthouse construction project. The Trades Council has expressed continued interest to the AOC about entering into such an agreement on this project. Following negotiations regarding potential terms and conditions of a PLA between Rudolph and Sletten and the Trades Council, (with input from the AOC), we concluded that this approach was beneficial.
I requested that the contractor enter into a PLA with the Trades Council to ensure certainty and timeliness as well as reduce variables in a construction project of this magnitude. This will be the first state courthouse project on which a PLA is signed. I should emphasize that we are considering this PLA to be a pilot effort that the Court Facilities Working Group and AOC will continuously evaluate for costs and benefits going forward, about which I will keep the Judicial Council apprised.
As you know, the new 71-courtroom facility is badly needed because of serious seismic and security issues and other significant functional problems. At $586 million for the total project (of which $544 million is construction), any delay can be costly. The Court Facilities Working Group and the AOC have worked with all parties, including the Legislature, the Department of Finance, County, and City to keep the project moving forward. To that end, the PLA is being put in place to ensure that this momentum continues by preventing potential expensive delays and related costs.
We realize there are some who criticize PLAs. We have examined those criticisms and believe for this project there is an overall benefit. We have been advised that a number of collective bargaining agreements for involved trades will come up for renewal within the construction window for this job. The terms of the PLA ensure that the construction process will be uninterrupted by those renewal anniversaries. The agreement precludes strikes and would prevent delays caused by shortages of qualified workers in the relevant trades. It will also streamline management of the project. We believe the PLA will be cost-effective. It will apply to most, but not all, of the bid packages—those smaller than $125,000 at all bid tiers will be exempt. Additionally, the PLA provides that the project has a built-in local participation goal of 30 percent for San Diego trades. (The Long Beach project, through Long Beach Judicial Partners, LLC, also is operating under a PLA. Examples of other projects with PLA in San Diego include Petco Field and the San Diego Convention Center.)
Packages for subcontractor prequalification are now being disseminated by the contractor. The AOC along with the contractor are taking steps to do outreach to local, small, emerging, and minority businesses, as well as the Disabled Veterans Business Enterprise Program to encourage them to bid on portions of the project. The project is scheduled for a fall bond sale with a construction start date by the end of December 2013.
There will be a further briefing on the PLA approach at an educational session during the June council meeting.
Steve
Who’s Responsible? The Judicial Council
The Judicial Council is the policymaking body of the California courts, the largest court system in the nation. Under the leadership of the Chief Justice and in accordance with the California Constitution, the council is responsible for ensuring the consistent, independent, impartial, and accessible administration of justice. The Administrative Office of the Courts (AOC) implements the council’s policies.
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Kevin Dayton is the President & 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. Follow him on Twitter at @DaytonPubPolicy.