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Unions Creep Closer to Monopolizing California High-Speed Rail Construction

UPDATE (December 7, 2012): A article today in the Fresno Bee (‘Needy’ Workers Will Get Jobs on High-Speed Rail) about the “Community Benefits” policy approved on December 6, 2012 by the California High-Speed Rail Authority contains a stunning revelation:

Five teams of contractors have been invited to bid on the first major contract for a stretch of the rail route between Madera and Fresno. How the new policy will translate into the contract has yet to be determined, said Jeffrey Morales, the authority’s CEO. Potentially complicating the issue is that each of the five would-be prime contracting teams has already signed project labor agreements with labor unions. Morales said the existence of project labor agreements between the contractors and labor unions is independent of any action the agency takes.

So all five prequalified bidders have negotiated and signed Project Labor Agreements with construction unions. How did that happen? Why? Was there some kind of deal involving the High-Speed Rail Authority? Are the five agreements all the same? What do these union agreements contain? Will the public ever get the chance to see these agreements, which give unions a monopoly on the work?

California High Speed Rail Project Labor Agreement Mandate - Section 10.1

California High Speed Rail Project Labor Agreement Mandate – Section 10.1


At its December 6, 2012 meeting, the board of directors of the California High-Speed Rail Authority unanimously approved a resolution to establish a “Community Benefits” policy for construction of California’s high-speed rail system. The High-Speed Rail Authority promptly issued a press release with quotes from local elected officials in the San Joaquin Valley who like the concept of community benefits but apparently aren’t aware of the big-city union scheme behind the plan.

While a typical reader of www.UnionWatch.org is instantly alerted by the phrase “community benefits” to the likelihood that government is executing a special deal at the expense of taxpayers, the policy sounds innocuous and benevolent to the ordinary person. Staff of the High-Speed Rail Authority claimed before the board vote that this policy will enhance employment opportunities for economically disadvantaged and low-income workers, veterans, youth, unemployed, homeless, single parents, and people with criminal records. It will “ensure that California benefits as much as possible.”

There are numerous signs that the High-Speed Rail Authority established this policy to provide a strong incentive for construction contractors to sign a Project Labor Agreement with unions for construction of the $68 billion-$100 billion rail system, including related structures such as stations. Staff for the High-Speed Rail Authority reported that “different stakeholders” will participate in the implementation of the policy, and no stakeholder has been more involved in perpetuating this massive, costly project than the State Building and Construction Trades Council of California.

As I reported in a January 11, 2011 article in www.TheTruthaboutPLAs.com entitled California’s Top Construction Union Officials Love the State’s $100 Billion High-Speed Rail Project, construction unions have long sought a Project Labor Agreement in order to monopolize the construction workforce on this project. With the Community Benefits policy now in place, here’s what some of the most politically-astute California construction industry officials expect to happen:

  1. The High-Speed Rail Authority will award construction contracts using a “design-build” bidding procedure. Instead of awarding contracts to design a project and then awarding contracts to the lowest responsible bidder to build it, the High-Speed Rail Authority is authorized under state law to award contracts to qualified corporate entities that combine project design and construction work. It will select the design-build entities using a somewhat subjective list of “best value” criteria that could result in design-build entities winning contracts even if they do not submit bids with the lowest price. The California Department of Finance will approve the criteria to award the design-build contracts, and the State Public Works Board will oversee the contract awards.
  2. The High-Speed Rail Authority will indicate in its construction contract specifications that bidders will be evaluated in part based on their plan to conform with the Community Benefits policy. Potential bidders will either be explicitly informed or figure out that the chances of winning a design-build contract will be greatly improved if they commit in their bids to negotiate and sign a Project Labor Agreement with construction trade unions in order to comply with the Community Benefits policy.
  3. By using this strategy to implement a Project Labor Agreement, the board of directors of the High-Speed Rail Authority and their union cronies will avoid controversial and high-profile public votes to negotiate it and approve it. California taxpayers and the U.S. Congress will remain generally unaware that unions cleverly obtained a monopoly on the construction of the rail project, because reporters will have difficulty researching and explaining this complicated procedure and because the Project Labor Agreement will not be a matter of public record. And the High-Speed Rail Authority will avoid accountability for the Project Labor Agreement; it can portray the agreement as the contractor’s own internal private and voluntary business decision.

There are recent precedents for imposing Project Labor Agreements on large government projects in California while evading public deliberations and votes. Clark Construction negotiated and signed a Project Labor Agreement for the San Diego Convention Center Expansion Phase III and negotiated and signed a Project Labor Agreement for the new Governor George Deukmejian Courthouse in Long Beach. Both the City of San Diego and the California Administrative Office of the Courts claim that these Project Labor Agreements are not a matter of public record, and Clark Construction declines to provide the union agreements to the public.

There is one weakness in the High-Speed Rail Authority’s plot to give construction unions a monopoly on the rail project with Project Labor Agreements: representatives of the beleaguered California construction organizations opposed to government-mandated Project Labor Agreements and other costly union schemes are tough, experienced, and smart. They are exposing the scheme.

Representatives of the Coalition for Fair Employment in Construction, Associated Builders and Contractors (ABC) of California, the Western Electrical Contractors Association (WECA), the Plumbing-Heating-Cooling Contractors Association of California (PHCC), and the Air Conditioning Trade Association (ACTA) spoke at the meeting against Project Labor Agreements for the High-Speed Rail construction. In addition, a representative of the Bakersfield-based Kern Minority Contractors Association spoke during public comment and asked that both union and non-union contractors have the opportunity to work on the high-speed rail project. (The High-Speed Rail Authority is moving forward with building the first segment of the high-speed rail line in the San Joaquin Valley, basically from Fresno to Bakersfield.)

High-Speed Rail Authority chairman Dan Richard, a former member of the board of directors of the Bay Area Rapid Transit District (BART), concluded board discussion of the proposed Community Benefits policy by responding to public criticism of Project Labor Agreements. Chairman Richard declared that while no decision has been made about how the new “Community Benefits” policy will be implemented, he thinks Project Labor Agreements are effective in improving the efficiency of project delivery, reducing the number of conflicts, and providing a way for minority contractors to get work.

Chairman Richard also reported that he attended a December 5, 2012 meeting at which the minority community expressed very strongly that a Project Labor Agreement was the way to achieve the policy objectives. It appears that Chairman Richard was the keynote speaker at a “California High-Speed Rail Small Business Opportunity Conference” sponsored by the American Asian Architects and Engineers in San Francisco on December 5, 2012 and featuring Congresswoman Barbara Lee (D-Oakland/Berkeley). Of course, it’s contractors that will employ trade workers in the San Joaquin Valley, not San Francisco architects and engineers.

Chairman Richard also took a moment during the meeting to recognize two important people watching in the audience: Bob Balgenorth, outgoing head of the State Building and Construction Trades Council of California and former High-Speed Rail Authority board member, and Robbie Hunter – the head of the Los Angeles-Orange County Building and Construction Trades Council – who is the incoming head of the State Building and Construction Trades Council of California. Were these union leaders attending the meeting to express support for employment opportunities for the homeless, or were they in the audience to see another piece fall into place for a union Project Labor Agreement on what will be far-and-away the most expensive public works “mega-project” in American history?

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.

When Union Officials Hold Office: An Infected Community College Board

In December 1997, the AFL-CIO implemented its “2000 in 2000” program to help elect union activists to public office. As the AFL-CIO reported in February 1999, “In 1998, we made progress toward our goal of putting 2,000 union members on the ballot in the year 2000. Over the next two years we will make a substantial effort to recruit, train, and assist union members running for office.”

Following that election, the AFL-CIO declared the 2000 in 2000 program as a success, with over 2500 union members holding elected office. It’s unclear if these union members were elected for the first time in 2000, or if the AFL-CIO simply managed to discover through surveys that more than 2500 union members were already in office.

It then launched the “Target 5000” program to get 5000 union members into elected office in 2002. The lack of triumphant AFL-CIO press releases about this program suggests it never achieved the goal of 5000 public office holders, but the dream of Target 5000 persisted at least through the 2004 elections. It is still referenced on web pages of the Massachusetts and Pennsylvania AFL-CIO.

In California, union officials are routinely elected to the California State Legislature and local government boards in the state’s major metropolitan areas. Union officials in elected office are particularly prevalent in Los Angeles, where Miguel Contreras improved the effectiveness of local election involvement of the Los Angeles County Federation of Labor, AFL-CIO during his leadership from the mid-1990s through 2005.

Sometimes the union presence on elected boards is outrageously brazen. For example, the chairman of the board of the John Swett Unified School District (in the San Francisco Bay Area) presided over a February 10, 2009 vote for a Project Labor Agreement on future John Swett district school construction while wearing a T-shirt representing his employer, the Ironworkers Local Union No. 378. The chairman threatened to have police remove a man and a woman from the board room when they complained from the audience that he was applying a strict three-minute time limit on speakers opposed to the labor agreement, but allowing speakers in favor of the labor agreement to speak without a time limit. (In response, they walked out voluntarily.)

Other times, public exposure can at least compel a union official not to vote with self-interest on union-related business, such as when a board member recused himself from a vote for a Project Labor Agreement at the Contra Costa Community College District after the public revealed he had failed to submit his legally-required statement of economic interests and then failed to report income from his union employer. (See the October 15, 2012 www.UnionWatch.org article Unions Increase Control of California’s Community College Boards).

The latest controversy at a California local government related to a union official on an elected board is at the Allan Hancock Joint Community College District in Santa Barbara County. In November 2004, the business representative for the International Brotherhood of Electrical Workers (IBEW) Local Union No. 413 in Santa Barbara County was elected to the Allan Hancock College board of trustees.

Electrical contractors with employees not in a union have experienced continual difficulties bidding on college construction projects since his election. This shouldn’t be a surprise, considering an explicit objective on the home page of the IBEW Local Union No. 413 is “to organize all workers in the entire electrical industry…including all those in public utilities and electrical manufacturing, into local unions.”

Because many California electricians choose not to belong to a union and have the requisite work experience and test scores to obtain their state electrician certification, the IBEW Local Union No. 413 needs to pursue this objective by using the coercive power of government to restrict competitive bidding. Here’s a compilation of antics concerning taxpayer-funded construction at Allan Hancock College since November 2004, complete with documentation when available: 

January 2006: Contractor associations learned through inside sources that someone was agitating for the Allan Hancock College board of trustees to require its construction contractors to sign a Project Labor Agreement with the Tri-County Building and Construction Trades Council. Contractors and organizations provided arguments to the college district against the proposal, and it did not come up for a vote.

December 2009: Shortly before a bid deadline, Allan Hancock College issued an addendum to bid specifications for the One-Stop Student Services Center. The addendum added “Enhanced Safety Requirements” that required 75 percent of the workforce of the general contractor and all subcontractors to be graduates of a California state-approved apprenticeship program. This was aimed at hindering bids from construction companies whose employees learned their trade and/or obtained state certification outside of the union training model.

Local contractors were incensed. Associated Builders and Contractors (ABC) of California coordinated with the Santa Maria Valley Contractors Association and the Western Electrical Contractors Association (WECA) to ask the college to extend the bid deadline and remove the “enhanced safety requirements” through a new addendum. College officials acknowledged the requirement was inappropriate and promptly issued an addendum removing the union-backed requirement and extending the bid deadline.

December 2010: At the direction of the IBEW board member at the November 16 meeting, the Allan Hancock College board of trustees held a “special meeting” on December 7 featuring a “Local Hire Preference Workshop” leading up to a vote at the December 14 meeting.  The workshop was intended to be “an exploration into a local preference hiring policy for capital construction projects,” but strangely the “exploration” did not include an invitation to contractors or contractor associations for participation. Nevertheless, contractors caught onto the plot, and representatives of the Santa Maria Valley Contractors Association and the San Luis Obispo County Builders Exchange spoke against the proposal in opposition to union officials supporting the proposal during public comment. One board member had warned the IBEW board member at the November 16 meeting that his occupation might create a conflict-of-interest, so people were aware that unions were behind the proposal. When the IBEW board member made a motion to approve the policy at the December 14 meeting, no one seconded the motion, and it failed.

See Labor Agreements Explored at Hancock Workshop – Santa Maria Times – December 8, 2012

The policy was similar to a policy previously proposed by the IBEW Union Local No. 413 to the California Space Authority (based in Santa Maria) and to the City of Lompoc. In addition, the Tri-County Building and Construction Trades Council was pushing at this time for an alleged local hiring policy (a “Local Jobs Construction Stabilization Agreement”) at the Santa Barbara County Board of Supervisors that was in reality an ordinary Project Labor Agreement. As shown in its December 2010 newsletter, the IBEW was concerned that non-union electrical contractors were winning numerous public works contracts in the Central Coast counties of Santa Barbara and San Luis Obispo.

October 2012: Allan Hancock College advertised for bids on Building “D” Repairs and Upgrades. Bid specifications included a requirement that any electrical installation worker on the job “must have completed an indentured IBEW/NECA apprenticeship program” (that is, a training program operated by the International Brotherhood of Electrical Workers union).

Contractor representatives from the Coalition for Fair Employment in Construction, Associated Builders and Contractors (ABC), and the Western Electrical Contractors Association (WECA) objected via email to the union-only requirement and pointed out that it was unfair and illegal, but the college did not rescind the requirement. Here is how a college official explained the situation:

The District takes considerable care to establish requirements for the District’s construction projects that reflect the needs of each project and which incorporate requirements consistent with applicable law. Underlying this approach by the District are principles of fair and equal bidding opportunities for all prospective bidders, regardless of a bidder’s union or non-union affiliation.

The District was not aware of the restrictive electrician apprenticeship requirement incorporated into the specifications for the Building D Repairs and Upgrades Project until the issue was brought to the attention of the District on October 10, 2012. The District could not take the action requested by ABC in its October 10, 2012, communications (amendment of the specifications provisions limiting acceptable electrical apprenticeship programs) because those communications were sent and received after the opening of Bid Proposals on October 9, 2012.

District staff forwarded the October 10, 2012 ABC letter to counsel for review and response, including discussions with the Project architect and the architect’s electrical engineering consultant. Through that evaluation process and communications with the project design professionals who prepared the specifications, District staff and counsel concluded Monday afternoon that the specifications provision was unduly restrictive and that the restriction on acceptable electrical apprenticeship programs was inconsistent with applicable law. With that conclusion, District staff and counsel determined that the appropriate and proper action is to amend the recommendation for award of the contract for the Project. Rather, an amended recommendation will be presented to the Board of Trustees at the meeting tonight to the effect that: (i) the original bidding process incorporated a flawed electrical apprenticeship provision; (ii) the Board should take action rejecting all Bid Proposals; and (iii) District staff be authorized to re-bid the Project after correcting the electrical apprenticeship provision.

At the October 16 board meeting, a representative of the Western Electrical Contractors Association (WECA) asked the board to rebid the project without the union requirement that prevented electrical subcontractors from participating in the bidding. This request upset the board, as well as the contractor with the winning bid (the contractor incorporated a union electrical subcontractor). There was even a veiled threat that the board would impose a Project Labor Agreement on future construction if non-union contractors continued to hassle the college. Ultimately, the board gave college staff authorization to proceed with awarding the bid, unless one of the contractors’ associations refused to be understanding of the mistake and submitted an official objection.

First time fool me, shame on you – second time fool me, shame on me. Would an established business organization have the courage to refuse to play along and instead insist on what is right and fair? Yes! On October 24, 2012, WECA submitted its formal written objection against Allan Hancock College awarding the bid with the IBEW requirement in the specifications.

Obviously, the public will need to perpetually monitor the board agendas and the bid specifications for contracts at Allan Hancock College, as long as someone on the board holds a vocational goal “to organize all workers in the entire electrical industry… into local unions.” As the AFL-CIO intended through the “2000 in 2000” and “Target 5000” programs, that board member is merely doing his job for his union. Meanwhile, the people need to do their job of seeing their interests properly represented at their own community college district.

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.