(Michael Chamberlain/Nevada Business Coalition) – Citizen Outreach took its case seeking to overturn the Project Labor Agreement (PLA) for the Clark County Detention Center Expansion project to the Nevada Supreme Court yesterday.
Citizen Outreach claims the PLA discriminates against non-union contractors and makes the bidding process less competitive and the project more expensive. The PLA requires that non-union contractors in many cases must hire employees from the union hall and forces non-union companies to pay benefits into union benefit funds.
The District Court had upheld the Detention Center PLA, citing an earlier court decision involving the Southern Nevada Water Authority (SNWA), but the case was given an expedited hearing at the Supreme Court due to its time-sensitive nature. Clark County claims there are several problems in the current facility that, if not corrected by this project, may force the County to move, possibly even release, some prisoners housed there.
Non-union contractors may only use seven of their own employees and are forced to man the job with workers from the union hall on a one-to-one basis (one employee of their own, one from the hall, one of their own, etc.). In addition, non-union contractors are forced to pay into union benefit funds, even for workers who are covered by the companies’ own benefit programs and will never qualify to receive benefits from the unions.
Citizen Outreach’s attorney, Theodore Parker, argued this project did not meet the standard set in the SNWA decision to allow a PLA. According to the SNWA decision, a PLA is permitted only if certain conditions are met. These conditions include a fear of work stoppages, strikes or labor shortages. On the Detention Center project, Parker maintained, citing the Verrill Dana report the County commissioned for the project, “None of these factors exist.”
The County disputed the notion that the PLA made the project less competitive, noting that 12 general contractors submitted bids under the original set of specifications and 13 bid the project after the PLA requirement was included. Its attorney also claimed that the PLA does not require non-union companies to pay double benefits. Parker’s rebuttal argued that non-union companies are forced to pay into the union benefit funds from which their workers will never qualify to collect. So they must continue to pay their workers’ health care and other benefits in addition to these contributions.
An attorney representing the Southern Nevada Building and Construction Trades Council, a consortium of trade unions, refuted the argument that there is little fear of strikes or work stoppages. He argued that these are more likely during economic downturns, such as the current recession, and the only way the County could avoid them was through a PLA.
Parker, Citizen Outreach’s counsel, mentioned that the only means in the PLA to prevent work stoppages is through Liquidated Damages provisions in which signatories to the contract can be fined for stoppages and/or delays in the project. These, Parker stated, are commonly included in non-PLA agreements as well.
Parker also pointed out that it is only unions who go on strike. There is no fear of strikes or work stoppages from non-union workers. He stated that the Cosmopolitan and City Center projects, despite being union, each had work stoppages.
During the hearing Justice James Hardesty asked each attorney whether they believed the requirement to hire workers from the union hall violated Nevada’s right-to-work statute. However, when informed that this subject had not been raised at the lower court, Hardesty did not force the issue. The SNWA decision specifically stated a similar provision in that case did not violate that statute but Hardesty appeared open to the possibility of discussing whether this aspect of the SNWA decision may have been wrongly decided.
It is always difficult to speculate how a judge or Justices will decide any particular case. However, Citizen Outreach and Theodore Parker made a compelling case that this PLA discriminates against non-union contractors and forces higher costs that must be absorbed by the taxpayers.
PLAs discriminate against non-union companies and workers and reward unions for bad behavior. Unions are the ones who strike, yet the very threat of those strikes is considered a justification to reward them with these agreements. Non-union contractors are forced to pay into union benefit accounts, yet their workers will never qualify to collect those benefits from the unions. Non-union companies are forced to use union workers instead of their own, reducing their efficiency and further harming their ability to compete.
PLAs are discriminatory and bad for taxpayers and Citizen Outreach is willing to challenge them. Hopefully, the Nevada Supreme Court will agree.
(Michael Chamberlain is Executive Director of Nevada Business Coalition.)