By Maurice Baskin, Venable,LLP Law PracticeNotwithstanding the recent election results, the Obama administration appears to be undaunted in its efforts to promote organized labor’s agenda at the expense of free enterprise in the construction industry. After a number of delays in 2009 and 2010, the administration is in many ways just getting started, and so is the opposition to its aggressive pro-labor agenda.
Important Successes in the Fight against Federal PLA Mandates
Through a combination of legal bid protests, grassroots opposition and media outreach, Associated Builders and Contractors (
ABC) prevented the Obama administration from imposing government-mandated project labor agreements (PLAs) on hundreds of millions of dollars worth of federal construction projects throughout the country in 2010. As of this writing, no federal agency has succeeded in mandating a contested PLA under the final Federal Acquisition Regulatory (FAR) Council rule issued May 13, 2010, which purported to implement the PLA Executive Order 13502.
In the face of ABC member bid protests filed with the Government Accountability Office, several federal agencies have issued and then withdrawn solicitations that included PLA mandates during the past year. ABC contends that government-mandated PLAs unlawfully restrict competition for federal contracts in violation of the Competition in Contracting Act and other laws, and that no justification exists for increasing taxpayer costs and discriminating against open shop contractors.
It also is expected that the new Republican majority in the U.S. House of Representatives will use its oversight and appropriations powers to restrain the administration’s unjustified expansion of PLAs on federal construction projects.
As of yet, there has been no published attempt to implement Section 7 of the executive order, which authorized the Office of Management and Budget to recommend whether to encourage PLAs on federally assisted projects (i.e., construction projects undertaken by state and local entities with federal funding assistance). Nothing in the executive order or the final rule currently in effect requires or directs any state or local government to mandate PLAs on federally assisted construction projects.
Meanwhile, citizens of San Diego County, following the lead of two California municipalities (Chula Vista and Oceanside), voted overwhelmingly in November 2010 to ban PLAs on public construction projects. Further information regarding the fight against government-mandated PLAs can be found on ABC’s comprehensive blog:
www.thetruthaboutplas.com.
More Federal Mandates Will Impact Contractors in 2011
Other pro-union executive orders issued in 2009 also started to take effect in 2010. Most prominently, the Department of Labor (DOL) issued a final rule implementing Executive Order 13496, requiring the posting of a new Notification of Employee Rights Under Federal Labor Laws. The notice posting requirement is now in effect for all federal contracts solicited after June 21, 2010. Contractors that fail to post the required notice face severe sanctions, including debarment on federal contracts.
The American Recovery and Reinvestment Act of 2009 (ARRA) continues to impact the construction industry, primarily because of ARRA’s significant expansion of the Davis-Bacon Act on federally assisted construction projects. Secretary of Labor Hilda Solis has hired hundreds of additional wage and hour investigators expressly to target construction contractors for violations.
The DOL also has issued Advance Notices of Proposed Rulemaking that threaten to place additional burdens on employers in the construction industry in 2011. These may include new affirmative action requirements and new rules governing employer payments for “advice” needed to respond to union organizing efforts.
The DOL’s Occupational Safety and Health Administration issued a final rule Aug. 9, 2010, updating work practice, training and certification requirements for crane and derrick safety in the construction industry. The biggest change to the 40-year-old standard is the requirement that all crane operators be certified and trained, either through an accredited testing organization or an audited qualification program offered by the employer.
In addition, more contractors are being forced to come into compliance with the new E-Verify rule, which went into effect for all federal contracts issued after Sept. 8, 2009. This rule requires virtually all government contractors to use the E-Verify system administered by the U.S. Citizenship and Immigration Service to confirm that their employees are lawfully authorized to work in the United States.
Finally, the new health care reform legislation has begun to impose employer-related insurance changes in all industries, including construction. Though the most sweeping changes made by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 will not take effect for several years, some new mandates have taken effect with the first plan year that begins on or after Sept. 23, 2010 (or Jan. 1, 2011, for calendar-year plans).
The New NLRB Majority Is Beginning to Impact Labor Law
The National Labor Relations Board (NLRB) is now controlled 3-2 by members who are generally viewed as favoring union positions on a variety of controversial labor law issues. Starting in August 2010 and continuing at an accelerated rate, the new NLRB members began to issue decisions that, as expected, tilt the balance of labor law in favor of organized labor. Of greatest interest to construction contractors, the new NLRB upheld the controversial union practice of “bannering” in the case of
Carpenters Union Local No. 1506 (Eliason & Knuth), 355 NLRB No. 159 (Aug. 27, 2010) (and other consolidated cases).
In another construction union case,
Roundy’s, Inc., 356 NLRB No. 27 (Nov. 12, 2010), the NLRB announced it plans to reconsider the ability of employers to exclude picketing unions from private property. At issue is the question of when employers will be deemed to have discriminated against union solicitation by allowing other third-party groups to solicit for their causes on private property.
The NLRB also recently held that an applicant referral system managed by a trade association for its members violated the National Labor Relations Act by interfering with union salting. The board made unfair labor practice findings against a chapter of the Independent Electrical Contractors of Houston for its role in promoting the applicant referral arrangement. See
KenMor Electric, 355 NLRB No. 173 (Aug. 27, 2010), appeal pending (5th Cir.).
In another significant change, the NLRB announced it will compound daily the interest owed by employers for back pay that accrues while unfair labor practice proceedings are pending. See
Kentucky River Medical Center, 356 NLRB No. 8 (Oct. 22, 2010). There is concern that this change will inflate future back pay awards into punitive amounts in a manner prohibited under the National Labor Relations Act.
In a similar vein, the NLRB’s acting general counsel announced a new policy of seeking 10(j) injunctions requiring reinstatement of employees who claim to have been discharged during union organizing campaigns. The reinstatement would be based on a mere finding of “reasonable cause” that the discharge was unlawful (i.e., before the employer’s defense has been heard by an administrative law judge).
Finally, the acting general counsel has issued a national press release to publicize a complaint filed against an employer’s Facebook policy. See
General Counsel News Release re American Medical Response, Inc. (Nov. 2, 2010). The employer’s policy prohibited employees from disparaging the company or its supervisors—a practice that previously had been held not to violate labor law.