Contractors are beginning to sound the alarm about an agreement that is being negotiated between Orange County government officials and organized labor. Such an agreement could mean labor’s support for a commercial airport at El Toro, but the contractors are worried that labor’s influence in Orange County would also greatly expand.
“Our members would be upset over a project labor agreement on El Toro,” said Sue McNiel, executive director of the Southern California Chapter of Associated Builders Contractors, an Anaheim-based group that represents 200 general and sub-contractors that are non-union.
“It would be a Faustian deal,” added Eric Christen, executive director of the Coalition for Fair Employment in Construction, a new group formed by contractors to oppose project labor agreements, commonly known as PLAs.
Negotiations have continued in recent weeks for a PLA between the county and representatives of the Building Trades Council. If a deal is reached, labor is expected to be mobilized to defeat the Safe and Healthy Communities Initiative, which is on the March ballot and which would make building an airport subject to approval of two-thirds of the voters.
However, labor is holding out for a PLA for other county projects as well, such as a planned jail, a courthouse and capital improvements to county buildings.
Typically, PLAs are negotiated just before construction is about to begin. What’s unique in Orange County is that construction on building the commercial airport at El Toro is not expected for at least two more years, if at all. El Toro is expected to be the largest public works project in Orange County history, at a preliminary cost estimate of $1.6 billion.
Support for El Toro
Christen said the contractors support an airport at El Toro and would help defeat the Safe and Healthy Communities initiative as long as the county doesn’t strike a deal with labor.
“We want to build it,” said Christen. “It doesn’t mean we’re against the (El Toro) project. You can be sure that 99% of our members will go forward and see that this (anti-airport) measure will be defeated.”
Christen said he came away from his meeting with OC officials feeling the county wouldn’t sign a PLA. However, the supervisors themselves said they are still open to the idea. Chuck Smith, chairman of the Board, and Cynthia Coad, another airport supporter, said they would consider it.
“The PLA is certainly something to look into and I’m glad it’s being examined,” said Coad. Coad said she could agree to a PLA that required contractors to pay a union-standard prevailing wage, but would not favor an agreement that discouraged bidding by non-union contractors.
(The law prohibits PLAs from barring non-union bids, but in practice they are sometimes set up in a way as to discourage such bids.)
Officials at other airports around the state,San Francisco, Oakland and San Jose,have signed PLAs with organized labor, which in turn has helped mobilize support for expansion of these facilities.
Businessman George Argyros, a powerful airport supporter, said he’s been following the negotiation between the county and labor, but said he wouldn’t comment on it until he sees the agreement in writing. While labor leaders have sidestepped questions about their support of the airport, Argyros said he believes that labor is on board.
“Labor has certainly been supportive of the airport. They understand that it means better jobs and better pay for their members,” he said.
Other El Toro airport supporters have indicated that they would welcome organized labor if that’s what is needed to overcome opposition to the airport. And among the airport opponents, one prominent executive is worried that labor would use the airport as a jumping off point to make inroads in nearby businesses.
Project labor agreements have been commonplace for years in big cities like New York and Chicago. Such an agreement typically permits a union to establish the wages for a construction job and, depending on the way the contract is structured, the contractor might have to hire union workers. In exchange, concessions are offered to the contractor, such as longer workdays, a slight reduction in hourly wages and a loosening of work rules.
Christen said PLAs were virtually non-existent in California, but in the last three years, at least 32 have been signed. Among those places where PLAs have been signed are the Los Angeles Unified School District, the South Sacramento Corridor Light Rail Project and the San Diego County Water Authority.
Most of the PLAs are in the public sector, but builders of private projects have also signed them, such as for the Staples Center in Los Angeles and the Pac Bell baseball stadium in San Francisco.
Entities that agree to the PLAs are doing so as a way to help push controversial projects through the political arena, not only locally, but also in Sacramento and Washington D.C.
“El Toro is another in a long line of projects that are forced to kowtow to the unions to get approval,” said Rick Peters, an Aliso Viejo-based marketing director for Riviera Electric of California Inc.
Opposing Efforts
In the past year, contractors formed the Coalition for Fair Employment in Construction to try to stop the PLAs. Its members include large individual contractors like Riviera Electric and Helix Electric and business groups such as the Southern California Chapter of the Associated Builders and Contractors and the California Chamber of Commerce.
“This is one of the largest issues that you can imagine” for contractors, said Ron Selvaggio, manager of human resources for Helix Electric, an electrical contracting company with 2,000 employees nationwide.
“A PLA doesn’t give non-signatory contractors a chance to bid contracts unless they sign an agreement with unions,” he said. “We don’t want to sign those agreements. People who work for us, if they wanted to join unions, would have done that.”
Mike Potts, a representative of the Los Angeles Orange County Building Trades Council, disputed many of the assertions of the builders.
“Every time we come up with an innovative idea, some anti-union group says it’s a full-employment act for unions,” said Potts. “The companies act as if we are their competition. We simply represent employees.”
County officials said an agreement with labor over El Toro wouldn’t be giving away much. They said non-union shops would be able to bid for the work at El Toro. And they said wages would have to be union-level anyway because on government jobs, contractors are required to pay prevailing wages.
But the contractors said there are other issues that make PLAs so unattractive that they don’t even want to bid on them. For example, contractors said that on some PLAs, they have had to hire their workers from the local union hall. And they said workers have had to contribute to the union pension fund, even though the workers wouldn’t be able to receive pensions from the unions because they are not members. Contractors said some PLAs force them to use apprentices trained at union schools, as opposed to the contractors’ own schools. The contractors said PLAs cause projects to be over budget and behind schedule as well as making projects anywhere from 15% to 20% more expensive.
Christen said his group’s members have begun to call supervisors and will try to exert political pressure to make sure a PLA is not reached.
“We have leverage in Orange County as well because unions are a minority in the county,” said Christen. “We’re going to make a concerted effort to let the county know that we are as legitimate a group as any other.” n
