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Northern California Builders Exchange Takes Stand Against PLAs

North Bay quits Builders Exchange


SANTA ROSA -- Petaluma-based engineering contractor North Bay Construction has pulled out of the North Coast Builders Exchange after 25 years over the contentious issue of project labor agreements (PLAs).

North Bay Construction partner and vice president of administration Steve Geney sent a letter dated September 30 to the exchange's president, Jerry Minton of Minton Electric, canceling membership and expressing disappointment that the exchange's board of directors has taken a stand on the issue.

The North Coast Builders Exchange serves Sonoma, Lake, and Mendocino counties and is the largest in the state, with 1,730 members, 20%-25% of which have unions. Sacramento-based Coalition for Fair Employment in Construction, a four-year-old statewide trade group that works against PLAs, talked to the exchange this spring about the issue. The exchange contacted North Bay Construction for the perspective of a union contractor, and Mr. Geney urged neutrality. On July 13, the exchange's board approved a position statement against discriminatory PLAs.

"It is undeniable though, that most Project Labor Agreements create a bidding process that is less competitive, and less inclusive," reads the statement. "In addition, PLAs can generate yet another level of administration and bureaucracy to a process that is already heavily regulated."

In his letter, Mr. Geney wrote that his company's concern was not with the position the board took, but was with the fact that the board took a position on a labor-related issue. "We're not asking them to side with us," he told the NORTH BAY BUSINESS JOURNAL. "We're asking them to take a neutral position."

He says his company belongs to the exchange because of its work on industry issues such as the California tiger salamander listing and workers' compensation insurance. He believes the exchange should follow the example of the Northern California Engineering Contractors Association, which also has union and nonunion members but has opted to stay neutral on PLAs.

Mr. Minton argues that the board's position is not "anti-PLA," but it is opposed to discrimination against nonunion contractors on publicly funded projects.

After the position statement appeared in the July 25 issue of the exchange's weekly newspaper, Building News, Mr. Geney wrote Mr. Minton, asking the exchange board to reconsider. At the August 19 board meeting, Mr. Geney and fellow North Bay union contractors Mike Smith Sr. of Argonaut Constructors, Roger Hermsmeyer of Oak Grove Construction, Paul Donaldson of Ghilotti Construction, and Gary Dahl of Arthur & Devincenzi Concrete asked the board to reconsider. The board upheld its position.


Causing arguments for years

Project labor agreements have been around for public and private projects since the 1930s. Opponents say PLAs tend to favor "union shops" over "merit shops" and can increase project costs. Proponents say PLAs ensure local employment and standardize wages and working conditions for all union and nonunion contractors and subcontractors on a job.

Common elements of PLAs often discourage nonunion contractors from participating in a project, according to Bill Scott, secretary-treasurer of the Sonoma, Lake, and Mendocino Counties Building and Construction Trades Council. Such clauses include use of state-approved apprentice programs, which are mostly operated by unions, and payment of wages and benefits similar to those used by unions.

Meanwhile, the legality of PLAs is in flux. In 1993, the U.S. Supreme Court found PLAs to be legal, as did California's top court in 1999. However, a federal appeals court in Washington, D.C., on July 17 upheld President Bush's Executive Order 13202 that bans PLAs on federally funded projects, overturning a ruling from a lower court. That ruling is expected to be appealed to the U.S. Supreme Court.

PLAs remain rare in the North Bay, with construction of the Buck Institute for Age Research campus in Novato one of the few major projects in this area to have a PLA.

Four recent PLA efforts were unsuccessful, often because of active efforts by the coalition. In June, the Santa Rosa Junior College Board of Trustees voted against a PLA on some $250 million in bond-funded projects slated for the next few years. In recent years, the Santa Rosa City Council has voted against PLAs on the Geysers Recharge Project and the newly completed Vineyard Creek Hotel & Conference Center. Earlier this year, Santa Rosa City Schools decided against a PLA on construction related to $100 million-plus in passed bonds.

While not full-blown PLAs, school districts in Napa County have implemented contractor prequalification requirements that include hiring apprentices.

Local unions have been mailing information packets to area governments about the benefits of PLAs, but they see entrenched opposition. Mr. Scott cites the 4-3 votes by the Santa Rosa City Council against the Geysers and Vintage Creek PLAs and against a union-promoted living-wage ordinance as examples.

However, unions are considering pursuing a PLA with Shappel Industries on its proposed development on the St. Vincent's School for Boys property in San Rafael, according to Mr. Scott. "It's easier to get PLAs on private work, because [the agreements] don't have to go through the political process; you just present the benefits to the owner," he says.