PLA Updates:

NLRB Issues Long-awaited Ruling
On Project Labor Agreements

AGC-America Website, Legal Advocacy August 2007

The Glens Falls Building & Construction Trades Council case grew out of a dispute between a private project owner and certain construction craft unions. The owner was a developer, owner, and operator of cogeneration plants which produce both steam and electricity. Its problems began in 1991, when certain craft unions informed the owner that they would oppose the environmental permits that the owner needed for several new plants unless the owner agreed to build the plants with union labor. In 1992, the owner finally agreed to do so. To that end, the owner also agreed to require its construction contractors to work under a project labor agreement that its construction manager would negotiate.

The case arose after the owner ran into several unrelated problems, and decided, in response, to abandon its agreement with the unions, who then filed a lawsuit for breach of contract. The owner, in turn, filed a charge with the National Labor Relations Board (NLRB), asserting that its agreement with the unions was an unlawful and therefore unenforceable “hot cargo” agreement. In May of 2000, AGC became the only trade association in the construction industry to file a friend-of-the-court brief with the NLRB in support of the owner’s position.

The central question for the NLRB was whether the agreement between the owner and the unions violated Section 8(e) of the National Labor Relations Act (NLRA), which forbids an employer to enter into an “express or implied” agreement with a labor union to refrain from doing business with another employer. Section 8(e) clearly applied, as the owner had agreed, in effect, to refrain from doing business with any construction contractor who would not sign the owner’s project labor agreement. On the other hand, as the unions noted, Section 8(e) also has a proviso stating that it does not apply “to an agreement . . . relating to the contracting or subcontracting of work to be done at the site of the construction . . . .” The unions maintained that the agreement fell within the scope of that construction industry proviso.

On July 31, 2007, the NLRB rejected the unions’ argument. Handing a legal major victory to AGC and its members, the board held that the proviso did not save the agreement from the remainder of Section 8(e), as the agreement failed the “test for proviso coverage set forth by the Supreme Court in Connell Construction Co. v. Plumbers Local 100, 421 U.S. 616 (1975).”

At the heart of the board’s decision was indisputable evidence that the owner did not have a collective bargaining relationship with the unions. It was clear that the owner had no employees in the building or construction trades, and no intention of employing anyone in those trades. The board found that the owner simply wanted “to remove the threat of union opposition to . . . regulatory approval,” and that the unions just “wanted a labor monopoly.” Under such circumstances, the Supreme Court had already declared that the proviso does not apply.

The decision promises to give construction contractors far greater control over their labor policies. The decision will make it more difficult for owners to require open shop contractors to work under labor agreements. The decision will also make it harder for owners to require union contractors to work under labor agreements that they have not had the opportunity to negotiate for themselves.

For a more detailed legal analysis of this NLRB decision, see the opinion by John "Rocky" Miller is Partner with Cox, Castle & Nicholson LLP, Los Angeles on page 2.

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Bush Signs Executive Order Barring GMLA’s

AGC-Cal Web Update - February 21, 2001

President George W. Bush has signed an executive order effective February 17, 2001 that prohibits the use of Government Mandated Labor Agreements (GMLA’s) on direct federal and federally assisted construction projects by federal agencies. The order applies to contracts awarded after February 17, 2001 and is intended to promote and ensure open competition. The order is intended to prohibit government mandates requiring the use of a project labor agreement and focuses on construction contracts as opposed to construction projects. AGC of California has long opposed the use of GMLA’s and has provided educational information to various public agencies throughout the state contemplating adopting a GMLA for a construction project. AGC of California's policy allows AGC to provide educational opportunities to public agencies contemplating adopting a GMLA but further supports project labor agreements negotiated by the contractor bidding or working on a project. The policy further states that AGC can oppose GMLA's on a case-by-case basis if contractors are not able to protect local prevailing industry labor practices through their direct participation in negotiation of the project labor agreement. Recently AGC has met with several public agencies to begin the educational process.

 The full Executive Order
 Amendment to Executive Order 13202

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NLRB’s Ruling On Owner-Mandated PLA’s -
Expected to Have Huge Ripple Effect

By John “Rocky” Miller - October 1, 2007

On July 31st, 2007 the National Labor Relations Board (NLRB) called into question the legality of most modern-era project labor agreements (PLA’s).

The Board finally issued its decision in Glens Falls Building & Construction Trades Council, 350 NLRB No. 42 (July 31, 2007), a case commenced in 1994 over two 1992 agreements that the Glens Falls Building & Construction Trades Council executed with an owner, Indeck Energy Services, and with the owner’s project manager, CRS Sirrine, on construction of the owner’s Corinth, New York cogeneration plant. The agreements required all contractors and subcontractors working on the project to sign a project labor agreement (PLA). The Board ruled that these agreements were unlawful “hot cargo” agreements under section 8(e) of the National Labor Relations Act as amended (NLRA), because they required the owner and project manager to cease doing business with all but union contractors. The agreements were not saved from illegality by the “construction industry proviso” to section 8(e) that permits “union-only” contracting restrictions agreed upon in the course of a collective bargaining relationship between unions and employers in the construction industry, because no “collective bargaining relationship” existed between the parties. Consequently, the agreements were found to be void and unenforceable.

The ultimate impact of the Glens Falls (or Indeck) decision is potentially enormous. Owner-mandated PLA’s negotiated outside of a collective bargaining relationship have been the rule, not the exception. All such agreements are theoretically void and unenforceable under the rationale of the Glens Falls decision, potentially including even government-mandated PLA’s. But Glens Falls is a decision narrowly tied to the facts of the case. The size of the shadow Glens Falls casts over PLA’s will not be known until numerous important issues it leaves undecided are resolved in other PLA challenges that will now proliferate. In the meantime, the decision does suggest the changes that are necessary in the “negotiation” of PLA’s for future PLA’s to be found lawful. It remains to be seen whether unions and owners will adopt them.

Questions Decided, and Questions Left Unaddressed
Section 8(e) outlaws agreements between labor organizations and employers to cease doing business with any other person. However, the “construction industry proviso” to section 8(e) states: “nothing in section 8(e) shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of construction….” The Supreme Court has ruled that the only contracting or subcontracting agreements protected by the proviso are those reached by labor organizations and construction industry employers “in the context of collective bargaining relationships and, in light of congressional references to the Denver Building Trades problem, possibly to common-situs relationships on particular jobsites as well.” Connell Construction Co. v. Plumbers Local 100, 421 U.S. 616 (1975).

In Glens Falls, the Board addressed only the issue of whether the agreements were reached “in the context of a collective bargaining relationship.” The Board sidestepped whether Indeck and CRS Sirrine were “employers in the construction industry” and whether agreements can be saved if they address “Denver Building Trades” “common-situs” issues.

The Board found the record showed no collective bargaining relationship, because the parties knew that Indeck had no employees in the building and construction trades and that neither Indeck nor Sirrine would employ anyone in those trades on the Corinth cogen jobsite. The sole purpose of the agreements was to bind Indeck to select a contractor who, in turn, would subcontract work only to employers who signed the PLA.

The Board concluded it need not address whether “Denver Building Trades” “common-situs” issues protected some agreements entered into outside “the context of a collective bargaining relationship.” Noting that it has never addressed whether this extra rationale exists for evading the prohibitions of section 8(e), it concluded that the Council failed to prove that the agreements were executed for the purpose of addressing common-situs issues such as jobsite tensions that might arise if union and non-union workers of different employers were to work side by side on the Corinth cogen site. Instead, Indeck’s clear purpose in executing the agreement was to remove the Council’s threat of union opposition to Indeck’s efforts to secure regulatory approval of its cogen construction plans, and, secondarily, to provide a steady labor source for contractors.

The Challenges to Come
Glens Falls will likely trigger a flood of attacks on owner-mandated PLA’s. Since a contract in violation of 8(e) is void and unenforceable, owners and contractors may simply stop complying and invite the unions to challenge whether the particular PLA is saved by the facts surrounding its negotiation. Or they may file unfair labor practice charges or federal court lawsuits under section 303 of the NLRA. Many private owners that acquiesced to PLA’s as the price for avoiding regulatory challenges to their projects by unions are unhappy with the terms of the PLA’s. Many union contractors working under PLA’s are disgruntled with the disruptions the jurisdictional provisions of such PLA’s impose upon their normal work assignments. Many non-union contractors have paid trust fund contributions they may now believe they can recover. Others will believe they have been directly damaged by the enforcement of the PLA and now have potential actions to recover damages through lawsuits. Some unions unhappy with the jurisdictional dispute resolution provisions of PLA’s now have options for ignoring these procedures and encouraging contractors to assign work to them despite the PLA. Even individual employees and their class action attorneys have the potential for claiming trust fund contributions and union dues paid on their behalf should be returned.

Building Trades Councils will argue in response to PLA challenges that PLA’s are all entered into, in large part, to address “Denver Building Trades” “common-situs” concerns. The recitals in many PLA’s specifically state this. All PLA’s have terms and conditions that address common-situs concerns. The Councils will also now proffer all other evidence showing that the parties to the agreement were concerned about common jobsite problems. The Council in Glens Falls doubtless felt this type of evidence unnecessary in the 1990’s.

New PLA challenges will force the Board or the courts to address whether and to what extent the construction industry proviso protects any agreements concerning common-situs issues reached outside of a collective bargaining relationship. This will require a decision also on whether and when an owner or project manager is “an employer in the construction industry.” If it is determined that some non-collectively-bargained “common-situs” agreements are protected by the construction industry proviso, they can only be lawful if reached with “an employer in the construction industry.” Agreements with non-construction industry employers would still be unlawful. AGC of America filed a “friend of the court” brief in Glens Falls arguing, as employers have for years, that the Board’s definitions used in deciding when an employer is one “in the construction industry” are flawed and inconsistent. They include many owners that are clearly not employers in the construction industry and that should not be permitted by the section 8(e)’s proviso to negotiate lawful PLA’s.

The effects of Glens Falls on government-owner-mandated PLA’s will be perhaps the most closely-watched and aggressively challenged. The Supreme Court ruled in the "Boston Harbor" case, Building and Construction Trades Council of the Metropolitan District, et al v. Associated Builders and Contractors of Massachusetts/Rhode Island, Inc, et al, 507 U.S. 218 (1993), that government agencies may enter into PLA’s when acting in the role of purchaser of construction services. The NLRA did not preempt such conduct, because it was “proprietary”, not “regulatory” in nature. However, the Court's decision was clearly premised upon the fact that the agency was doing nothing more than a private party could lawfully do: “To the extent that a private purchaser may choose a contractor based upon that contractor's willingness to enter into a pre-hire agreement, a public entity as purchaser may do the same.” Id., at 231. The lawfulness of the PLA in Boston Harbor was not disputed. Today, a challenge to a different PLA, premised upon the new precedential interpretation of section 8(e) issued in Glens Falls, and reviewed by a different Supreme Court could provide the recipe for a conclusion that the NLRA preempts government-owner-mandated PLA’s executed outside of a collective bargaining relationship.

Will the Sun Soon Rise on an Era of Lawful PLA’s?
Owner-mandated PLA’s have been favored tools for Building Trades Councils nationwide since the late 1980's. The Councils will not abandon their PLA strategies. The question is what those strategies will look like post-Glens Falls.

Many Trade Councils will likely “wait-and-see.” This approach will assume few PLA’s are likely to be challenged and that Glens Falls is a narrow decision easily defeated in a PLA challenge by offering evidence of “common-situs” concerns. Nothing will be done regarding existing PLA’s. New PLA’s may be approached a bit differently. The Councils may ask the owner to have a contractor present or a project manager present that will commit to hire at least a clean-up crew on the jobsite to provide an argument that the PLA is being negotiated in the context of a collective bargaining relationship. They will ask for PLA stipulations that the owner and project manager intend to be employers of craft workers and that they are concerned with minimizing common-situs problems. Then, the Councils will probably count on the Board’s glacial pace of deciding cases to protect PLA’s from further erosion until a favorable change in the Administration and the appointment of more sympathetic Board members. The Councils may be careful to walk away from adverse decisions over PLA’s rather than risk a new PLA case going before a Supreme Court considered unfriendly to their interests.

Some Building Trades Councils may be more proactive. For existing and future PLA’s, they will seek to ensure the existence of a collective bargaining relationship. Some may propose to renegotiate existing PLA’s prospectively with the owner and the owner's existing general contractors that are or will be employing some craft workers. For PLA’s where no contractors have been selected, establishing a collective bargaining relationship by asking a project manager to commit to hire a small crew on the upcoming work may be viewed as insufficient to create a true collective bargaining context since the project manager will typically not “subcontract” the rest of the work to others. Thus, an approach may be made to bring to the owner’s table a legitimate collective bargaining context, a multiemployer bargaining unit representative of the general contractors that will likely bid the work to be performed. The bargaining representative should be sufficient to impart the necessary collective bargaining context, because it may lawfully enter into a broad subcontracting clause involving all trades. Woelke & Romero Framing, Inc. v. N.L.R.B., 456 U.S. 645 (1982). Nonetheless, the Councils may also seek to bring along multiemployer bargaining representatives of the subtrades likely to bid to the general contractors for the work to forestall the general contractors bargaining away some PLA elements of particular interest to the subtrades.

Whether the Building Trades Councils adopt a more proactive approach or not, individual owners that have PLA’s or that still feel compelled to enter into new PLA’s may review Glens Falls and determine that they need to ensure that any PLA they have or enter into prospectively is one which will be lawful. Such owners, including government owners, may thus soon reach out to their existing contractors or to the multiemployer bargaining representatives of the pool of contractors likely to bid their work and ask for assistance in renegotiating an existing PLA or negotiating a new one.

Glens Falls was long in arriving. The ripples it has triggered may well be stronger and longer in impact than many suspect.

Mr. John "Rocky" Miller is a Partner and leads the Labor and Employee Benefits Group of Cox, Castle & Nicholson LLP., Los Angeles. Mr. Miller also represents the AGC of California and other trade associations and individual employers in labor relations and employee benefit matters. He can be contacted at by phone at: 310.284.2235 or email at: rmiller@coxcastle.com.

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NLRB Rejects Project Labor Agreements Negotiated Under Threat of Regulatory Interference

September 10, 2007
Article by Linda S. Husar, Seth Neulight and Chris Baker Thelen of Reid Brown Raysman & Steiner LLP

On July 31, 2007, the National Labor Relations Board (“Board”) issued a decision in Glens Falls Building and Construction Trades Council, 350 NLRB No. 42 (2007). The Board considered the enforceability under the National Labor Relations Act (“NLRA”) of two “project labor agreements” (“PLA’s”) made in connection with the construction of a power plant: one between the general contractor and a council of construction trade unions, the other between the plant owner and the same council of unions. These agreements provided that the owner or general contractor would ensure that the subcontractors, who would actually employ the workers, used union labor throughout the project.

The parties entered into these PLA’s only after the unions made clear they would otherwise complicate both the regulatory proceedings and permit approvals needed for the owner to begin construction. In that context, the Board in Glens Falls held that such agreements were unenforceable under the NLRA. In light of this decision, project owners and general contractors should re-evaluate the validity of any existing PLA’s they have negotiated under similar circumstances, and exercise caution before entering into these agreements with unions in the future.

Background
In Glens Falls, the plant owner, Indeck, developed “cogen” power plants and sought to build several such facilities in upstate New York in the early 1990s. Construction of such plants required multiple levels of regulatory approval. During regulatory proceedings for Indeck’s planned cogen project in Corinth, New York, area labor unions filed objections. In response, Indeck engaged in discussions with the Glens Falls Building and Construction Trades Council (“the Unions”) and expressed its intent to build the Corinth plant with union labor. Indeck referred the Unions to its general contractor, Sirrine for further discussions. Based upon the perceived slow pace of negotiations, the Unions solicited and received from Indeck a letter in which Indeck represented that it would ensure any subcontractor on the project used union labor. Indeck officials testified that this letter was sent in exchange for the Unions’ commitment to refrain from attempts at “intervening to try and kill the [Corinth] project” in regulatory proceedings.

Sirrine eventually reached an agreement with the Unions concerning the use of union labor on the Corinth project. This agreement provided that all of Sirrine's subcontractors would execute a PLA which would bind the subcontractor to use union labor and pay union-scale wages on the project. Notably, Sirrine itself was not to employ directly any employees engaged in construction at Corinth.

Complications developed when a dispute arose between Indeck and Sirrine. As a result, Indeck terminated its contract with Sirrine and retained another firm to serve as general contractor on the Corinth project. That firm was not a signatory to the PLA and, in fact, completed construction of the Corinth plant using both union and non-union labor. The Unions later sued Indeck in federal court, alleging that it breached its letter agreement to build the Corinth plant using union labor. In its defense, Indeck argued that any agreement it had with the Unions was unenforceable under Section 8(e) of the NLRA.

That statute provides:

“It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void: Provided, That nothing in this subsection shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work.”

The federal district court stayed the Unions’ lawsuit pending resolution of an unfair labor practice charge filed by Indeck against the Unions concerning the same issue of enforceability of the agreement.

The Glens Falls Decision
At the outset, the Board concluded that Indeck’s agreement with the Unions was “within the scope of the prohibitions of Section 8(e) because it constitute[d] an implicit agreement by Indeck not to do business with another person – specifically, any contractor who would subcontract to nonunion subcontractors.” Thus the central issue left for the Board to decide was whether the agreement fell within the above-highlighted “safe harbor” language of Section 8(e), known as the “construction industry proviso.”

The Board began its analysis by noting that the Unions bore the burden of proving coverage under the proviso. The Unions argued that Indeck and Sirrine were employers in the construction industry, and that both the Indeck and Sirrine agreements were reached through collective bargaining. In the alternative, the Unions argued that the agreements were negotiated with the intent to resolve potential labor disputes which might have arisen at the construction site if union and non-union employees were allowed to work side-by-side. The Unions drew support for this argument from dicta in a Supreme Court decision suggesting that such agreements might be valid outside the collective bargaining context if “they were directed toward the reduction of friction that may be caused when union and nonunion employees of different employers are required to work together at the same jobsite.” Glens Falls, at p. 5, citing Connell Construction Co. v. Plumbers Local Union 100, 421 U.S. 616 (1975). The Board rejected both of the Unions’ assertions.

First, as to the collective bargaining claim, the Board emphasized that nothing in either agreement “purported to relate to terms and conditions of employment for any Indeck or Sirrine employees.” The Board observed that “it was understood that Sirrine and Indeck would not be employing any workers in the building and construction trades on the . . . jobsite.” In the Board’s view, then, the sole purpose of the Unions’ agreements was to “bind Indeck to select a contractor who, in turn, would subcontract work only to employers who signed the...PLA.”

Next, the Board considered the Unions’ claim that the Indeck and Sirrine agreements were valid under Section 8(e) because they were intended to reduce potential labor strife at the jobsite. The Board declined to resolve this novel issue on the ground that the Unions had failed to prove that either agreement had as its purpose the reduction of labor conflict. Rather, the Board found the record showed both “that Indeck’s purpose was to remove the threat of union opposition to Indeck’s efforts to secure regulatory approval of its cogen construction plant,” and that “the [Unions] wanted a labor monopoly at a major construction site to provide employment for their out-of-work members.” As a result, the Board ruled that both agreements were unenforceable, and issued an order compelling the Unions to dismiss their breach of contract action against Indeck.

Impact of the Glens Falls Decision
For over a decade, developers seeking to build power plant facilities have struggled with union interference in the regulatory permitting process. Unions often insist upon PLA’s as the price of their cooperation with a project. PLA’s effectively guarantee work for union members, and also allow developers to increase their chances of obtaining the necessary permits. Glens Falls may limit the ability of developers and unions to achieve such goals through these agreements. At the very least, developers will have to act carefully if they wish to enter into enforceable PLA’s.

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Congress Should Stop Environmental
Blackmail by Unions

By James Sherk, September 19, 2007, WebMemo #1624. Mr. Sherk is a Bradley Fellow in
Labor Policy in the Center for Data Analysis at The Heritage Foundation.
       
Most Americans support protecting the environment, and the goals of most environmental laws are worthy. Increasingly, however, organized labor is using environmental laws to blackmail companies into agreeing to their demands. Many unions threaten to delay or block the process of obtaining environmental permits unless a company agrees to build its facilities using only union labor. The inflated costs of union labor get passed on to consumers and taxpayers.

The government does not enforce contracts signed under duress. Congress should specify that union-only construction agreements are unenforceable when unions have either threatened to object to environmental permits or have actually done so. 

Construction Unions Trying to Regain Monopoly Status
A labor union is a cartel. It attempts to raise the wages of its members by monopolizing the supply of labor. Unions want to force companies to choose between hiring union workers at inflated wages and abandoning a project as uneconomical. They do not want companies to have the option of hiring non-union workers at market wages.

In the construction industry, unions have lost their labor monopoly. Today only 13 percent of private construction workers belong to a union, down from 40 percent in 1973.[1] Businesses no longer need to hire union workers at 40 percent above fair market rates. This means more construction projects, more construction jobs, and less expensive buildings for businesses and homeowners. Since competition forces business to pass their cost savings on to consumers, it also means lower prices for products and services.

This benefits everyone but unionized construction workers. Just as ending a business monopoly benefits consumers and the economy, so does ending a labor monopoly. Unions, however, want to get their monopoly powers back. Now they are misusing environmental laws to do so.

Environmental Laws Have Worthy Goals
Almost all Americans value a clean environment. The government has passed many laws intended to protect the planet from wanton pollution. Before beginning most major construction projects, contractors must obtain environmental permits and pass environmental impact reviews. Labor unions, however, use environmental laws to accomplish much less worthy goals.

Using Environmental Laws for Blackmail
Organized labor uses environmental regulations to blackmail corporations into hiring unionized workers. Many environmental laws allow residents and community groups to challenge environmental permits or to file environmental impact statements of their own.

Unions frequently threaten to take advantage of these options if a company will not sign a project labor agreement (PLA). In a PLA, a company agrees that its construction contractor and all subcontractors will only employ unionized workers. If the company does not sign a PLA, the union will fight the environmental permits at every step of the process. They will commission and submit their own impact studies that invariably show that the project would devastate the environment. Even if the union cannot prevent the project from going ahead, it can often delay its start by more than a year, costing the company millions of dollars.[2] If the company agrees to shut out non-union workers, the union will make the environmental complaints go away.

It is an offer that many companies cannot refuse:

• When the city of Roseville, California, applied for permits to build a new power plant in 2004, California Unions for Reliable Energy submitted a detailed request for environmental information about the project to use in filing objections. The city estimated that union-induced construction delays and higher permitting costs would increase the cost of the project by $15 million, while hiring union workers would only raise costs by $3 million. The city signed a PLA and the union withdrew its information request.[3]
• The Service Employees International Union (SEIU) raised environmental objections to Sutter Health’s $465 million hospital expansion in Sacramento, California. Sutter spent more than $2 million on environmental impact reports and held more than 30 public meetings before the city council unanimously approved the project. The SEIU raised no objections until after it began negotiations to organize workers at several Sutter Hospitals. It then filed suit in court alleging environmental violations not found in the earlier studies or the previous five years of public meetings. Though Sutter did not capitulate, delays cost the hospital between $3 million and $5 million per month.[4]
• Indeck Energy Services, Inc., applied to build several cogeneration power plants in upstate New York. The Building and Construction Trades Council objected to Indeck’s environmental impact statement and requested a meeting with Indeck President Russell Lindsay. The National Labor Relations Board (NLRB) explained that the unions told Lindsay that “they would stop every Indeck project in New York unless it went union.” Indeck agreed to use only unionized workers, and the unions reversed their environmental objections, instead expressing their strong support for the project.[5]

        Organized labor abuses America’s environmental laws. Their objections have nothing to do with protecting the environment. As soon as a company agrees to hire only union workers, the union drops its environmental complaints. This strategy makes it more expensive for a company to resist union demands than to hire unionized firms – and is nothing less than blackmail.

Coerced PLA’s Should Not Be Enforced
Section 8(e) of the National Labor Relations Act specifies that employers may not sign union contracts agreeing to refrain from doing business with a non-union (or any other) employer. The proviso to Section 8(e) creates a specific exception for construction unions and allows PLA’s.

However, the government does not enforce contracts signed under the threat of force. A construction contractor who forced a homeowner to sign a contract at gunpoint agreeing to only use his company for home improvements could not enforce it in court. The same is true for labor unions. The NLRB recently ruled that the principle that contracts made under duress cannot be enforced applies when unions use environmental blackmail to obtain a PLA.

Despite signing a PLA specifying the use of only unionized workers, Indeck constructed its power plants using both union and non-union labor. The unions sued for breach of contract in federal court, and the case ultimately went before the NLRB. In Glens Falls Building and Construction Trades Council, the NLRB ruled that because Indeck was coerced into signing it, the PLA was invalid and the unions could not sue Indeck for ignoring it.

The NLRB made the right decision. The government should not permit unions to abuse environmental laws to blackmail companies. It is one thing for a worker to withhold his labor unless he receives higher wages. It is another to threaten to use the government to stop the project unless he gets that raise. Because a future Board could reverse this legal interpretation, Congress should codify the administrative ruling.

Congress should amend the National Labor Relations Act (NLRA) to specify that the government will not enforce project labor agreements signed after unions use or threaten to use the regulatory process to block or delay construction projects. A company that unions blackmail into singing a PLA should be free to disregard the PLA and hire non-union workers once it has the necessary environmental permits to begin construction.

Conclusion
The government should protect the environment, but it should not allow unions to use environmental laws to blackmail businesses. Union monopolies damage the economy and cost taxpayers and consumers millions of dollars. The government should not enforce contracts signed under the threat of regulatory interference. Congress should codify the recent Glens Falls decision by the NLRB. Congress should change the law so that the government does not enforce project labor agreements signed after regulatory blackmail.

[1] Barry T. Hirsch and David A. Macpherson, "Union Membership and Coverage Database from the Current Population Survey." Database available online at Unionstats.com, at www.trinity.edu/bhirsch/unionstats/.
[2] Kathy Robertson and Celia Lamb, "Unions Wielding Environmental Law to Threaten Foes," The Sacramento Business Journal, January 29, 2006, at http://sacramento.bizjournals.com/sacramento/stories/2006/01/30/story2.html?page=1.
[3] Ibid.
[4] Ibid.
[5] Glens Falls Building and Construction Trades Council, 350 NLRB No. 42 (2007).
[6] 29 USC §158(e).

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