14.1 The Construction Worker

All construction projects have a limited duration. When a project is completed, the craft workers move on to another project, or are laid off until more work becomes available. The average construction worker often has no fixed relationship with any one contractor, and his tenure of employment with a given employer is normally indefinite and temporal. He is tightly bound to his occupation and typically is only loosely associated with any given construction company. He may work for several different employers over a period of time, and is known more as a carpenter or cement mason than as the employee of any particular firm.

Although these generalities are not true in every general contracting concern, and are much less true for workers in the specialty trades, such as electricians and plumbers, than they are for carpenters, ironworkers, and others in the basic trades, they still typify a great deal of the employment in the construction industry. The construction worker is in the unusual position of being a skilled craftsman with no permanent place of employment. This circumstance is a manifestation of the fact that the projects of a typical construction company are of relatively short-term duration, and are variable as to location, along with the fact that different projects require different combinations of trade skills at different times in the work. All contractors experience fluctuating requirements for manpower as new projects are started and as existing jobs are completed. The economics of a contractor's business operation dictate that most of a contractor's work force be drawn from a local pool of skilled manpower, as company needs and the needs of projects dictate.

Although the popular conception of a construction worker is that of a “migratory worker,” the geographical mobility of such people is variable with the craft and the individual circumstances of employment. Crews on large industrial construction projects and on highways, pipelines, bridges, transmission lines, tunnels, and other engineering construction are necessarily mobile. Tradesmen such as millwrights, boilermakers, pipe fitters, pile drivers, and structural ironworkers often follow their specialties over wide geographical areas, moving from one project to another. Craft workers in building construction are much more likely to find continuous or relatively continuous employment within a given locality. A number of considerations such as home ownership, family ties, schools, pensions, and other factors cause many construction workers to be reluctant to move their places of residence. This, among other reasons, leads to a certain amount of movement into and out of the construction industry itself. Many tradesmen find jobs elsewhere in the economy when local job opportunities are limited in construction for their particular craft skills.

In the construction industry, some more or less standard terms are applied to construction workers, and are used to designate the skill level of the individual worker. The term journeyman (sometimes craftsman, and the archaic term mechanic) is used to designate a skilled worker who is fully qualified in a given craft or trade. An apprentice is a person who is enrolled in a craft apprenticeship program certified by the Bureau of Apprenticeship and Training. Helper, trainee, preapprentice, and subjourneyman all refer to unskilled and semiskilled craft workers who are below the skill level of journeymen and are not classified as laborers or apprentices.

14.2 Employment in the Construction Industry

The construction industry, as this nation's largest single economic effort, provides about 6 percent of the total national civil employment. At the present time, employment in this vital industry totals approximately 6 million workers. Construction employees are, and historically have been, predominantly male. However, women are increasingly finding employment and career opportunities as craft workers and as management workers in construction. Construction relies more upon younger workers than do other industries with a quarter of all persons employed in this industry being younger than 30 years of age. This circumstance, however, results in a higher attrition rate among new entrants.

Recent years have seen a reduced inflow of new workers into the construction industry. With an estimated need for more than 200,000 new tradesmen per year, the construction industry is exerting every effort to attract additional workers by improving the industry image, actively recruiting young workers, improving retention, establishing better training programs, and providing more on-the-job experience. Statistics show that the construction workforce is aging, and at the present time there are not as many new entrants joining the industry as there are construction workers retiring.

14.3 Employee Benefits

Construction workers earn good wages and salaries. In addition, construction contractors now typically provide their employees with an array of pay augmentations, which are known collectively as fringe benefits. Employee benefits can be defined as programs, other than direct wages, that compensate employees in some way. The nature of these benefits varies somewhat between union shop and open shop contractors in terms of their details of operation and administration, but their provision is now a common feature throughout the construction industry. Some of these benefits are mandated by law such as Social Security, Medicare, and workers' compensation. Benefits provided voluntarily by employers include such fringe benefits as pension plans, profit sharing, health and welfare funds, sick leave, life insurance, paid vacations, paid holidays, employee education, legal aid funds, annuities, bonuses, supplemental unemployment payment plans, apprenticeship programs, employee stock ownership plans (ESOPs), employee-sponsored 401(k) retirement savings programs, and other types of benefits. Such benefits are made available to construction workers through private company plans and/or those of contractor professional associations, unions, and public organizations.

The motivation for such generous employer-provided benefits is quite obvious. These programs are designed to meet contractors' needs for skilled craft labor and to serve the purpose of attracting and retaining skilled and productive tradesmen, improving employee morale, and providing a high level of job satisfaction. To receive the full advantage from such programs, contractors exert every effort to communicate information concerning the nature and value of such benefits to their employees.

14.4 The Union Contractor

In the conduct of their labor relations, some contractors work under union contracts with their employees, while others operate as open shop or merit shop concerns. The construction unions will be considered first, followed by a discussion of open shop or merit shop employment.

A union contractor is one who has signed a collective bargaining agreement with a group of workers who have elected to organize in a union. Such a contractor's labor relations are determined for the most part by the provisions of the labor contract negotiated between the contractor and the organized workers. This contract is referred to as the collective bargaining agreement (CBA). Although the contractor may or may not have been directly involved with the negotiation of the CBA inasmuch as some contractors have elected to have their trade associations or professional organizations negotiate their labor contracts in their behalf, he is bound by the terms of the contract when he signs the labor agreement.

The workers of such employers are required to belong to, or to join, the appropriate union and often must be hired through the local union hiring hall. Thus, the union contractor has the decided advantage of having access to a constant pool of skilled labor, with all of these tradesmen being qualified for the work of their trade by virtue of having fulfilled union entrance requirements and apprenticeship training requirements. These workers typically have a strong sense of identity with their union and often refer to themselves as “brothers” (both men and women) in the union. Many of the unions of skilled construction craft workers have the term brotherhood in their names. The matter of compensation and working conditions for these skilled workers in terms of wages, hours, fringe benefits, and other conditions of employment are largely determined by the language of the labor contract between the contractor and the union and are not established directly by the contractor or his company.

As a general rule, relations between the contractor and its unionized employees are casual and impersonal. The tradesman is referred to a project by his union, following a request for skilled labor placed by the contractor with the union, and his job performance is largely judged by his foreman, who is also a union member. There is little direct contact between the construction worker and the contractor-employer. Personal relations are almost nonexistent because rates of pay, holidays, overtime, and other conditions of employment are not negotiated with the employee directly, but rather with his union, and are determined by the labor contract which has been negotiated.

When he reports to a project from the union hall, the tradesman is assumed to know his trade and is expected to be able to capably perform any task that is assignable to his craft. He receives the same rate of pay as his fellow craftsmen, regardless of their age, relative skills, and abilities to produce. By and large, the craftsman's first loyalties are to his union, whose well-being he closely associates with his own. He is typically not particularly “company-minded” toward his employer because he has no fixed relationship with any given contracting firm.

As a result of these circumstances pertaining to the employment of unionized tradesmen, a contractor's labor relations are conducted almost entirely with the craft union locals whose members the contractor employs, rather than with the workers themselves. Labor relations for a union-shop contractor consist primarily therefore, not of interpersonal relationships but of labor contract negotiation and administration.

14.5 The Role of the Unions

Despite the fact that many people have conflicting personal opinions with regard to unions, there is no denying the fact that unions make an important contribution to the operation of the construction industry. The unions have a stabilizing influence on an area of the construction contracting business that is basically unstable, the matter of availability of qualified skilled labor when it is needed.

From the point of view of the contractor because there are unions and because there are negotiated labor contracts, fixed wage rates are established and much of the uncertainty is removed, which is associated with the availability and employment of labor at the time it is needed for a construction project. The unions provide a pool of skilled and experienced workers from which the contractor can draw as its needs indicate.

Belonging to a union can offer many advantages to the working craft person. A prime consideration is the leading role organized labor has taken in raising wages, and enhancing working conditions, and establishing some degree of job security for its members. Unions exist and can achieve these benefits for their members because although the bargaining power of the individual worker is weak, that of an organization of workers can be very strong. The workers are secure in the belief that their union will provide them with good wages and benefits, and will secure good working conditions for them, and will protect them from unfair treatment, and will in general exert every effort to improve their situation. They enjoy a sense of belonging to a group that has the common purpose of mutual assistance and benefit, and through their elected union representatives they have a voice in the determination of their wages and working conditions.

It is true that some union members belong, not of their own volition, but as a matter of necessity to keep their jobs, in closed shop areas, for example. However, it is generally agreed that most union members are not unwilling captives of organized labor, but rather belong to their union because it is their desire to do so. Of course, it can also be agreed that not all union members are enthusiastic unionist advocates. Many union workers do not actively participate in union affairs nor even attend local union meetings regularly. However, the point remains that most union craft workers in construction identify very strongly with their union and have a strong sense of union patriotism.

14.6 Union History

Trade unions originated at least 150 years ago and exist not only in the United States but in many other nations as well. Many unions have the word international in their title. However, organized labor has become a stable element in the American workforce only within the past 85 years or so. In 1886, the first enduring union association in this country was founded after a long era of repeated failures. The American Federation of Labor (AFL) was organized in that year with Samuel Gompers as its first president. Since the time of its inception, the AFL has traditionally been identified with the skilled craft worker. The AFL is a confederation of many sovereign national unions, each of which remains free to manage its own internal affairs. The construction trade unions were charter members of the AFL.

At the time the AFL was founded, semiskilled and unskilled factory workers were largely unorganized. The Knights of Labor, an organization of diverse membership, had made some progress in the matter of organizing labor in the workforce, but was waning rapidly. Although the AFL existed, its views were not in accord with organizing the industrial workers. In 1905, the Industrial Workers of the World (IWW) was organized to fill the void left by the AFL's unwillingness to meet the needs of these workers. The IWW advocated the elimination of capitalism, engaged frequently in violent strikes, and declined rapidly in the post-World War I era. Once again no central organizing force existed to advance the cause of the mass-production worker, although at the time several independent industrial unions were leading somewhat precarious existences.

Enactment of the Norris-LaGuardia and Wagner Acts in the 1930s (see Chapter 13) encouraged and assisted union activity. The AFL began to extend a lukewarm welcome to some industrial unions, but relegated them to a second-class position known as “federal locals.” This attitude enjoyed no great success because the AFL craft unions, apprehensive that they would be obliterated in a huge mass of industrial production workers, pressed demands on the federal locals for jurisdiction over members who were engaged in craft occupations.

In 1935, the disgruntled leaders of eight industrial unions that were associated with the AFL formed the Committee for Industrial Organization with the stated purpose of organizing the mass-production industries. This committee was organized within the AFL and sought to induce the AFL to assume a dual personality, representing both craft workers and industrial workers. This was nothing short of treason in the eyes of the AFL hierarchy, and the committee was summarily ordered to disband or be expelled from the federation. In 1936, the AFL executive council suspended the Committee for Industrial Organization. In 1938, after two fruitless years of attempts at reunification, the committee became the Congress of Industrial Organizations (CIO), an association of autonomous industrial unions, with John L. Lewis of the United Mine Workers as its first president.

In the following years, the AFL and the CIO engaged in a bitter struggle for the leadership of American organized labor, and both sides came to recognize the need for reconciliation. However, personal animosities and conflicts of interest proved difficult to resolve, and the merger was delayed for many years. Not until 1955 were the two groups able to reconcile their differences sufficiently to negotiate a reunification. The new federation of labor unions became the AFL-CIO.

14.7 Construction Unions

The vast majority of unionized construction tradesmen belong to one of the AFL-CIO construction trade unions or the International Brotherhood of Teamsters. The Teamsters is a very large AFL-CIO union that includes construction truck drivers as a part of its total membership.

However, significant numbers of construction workers are represented by unions other than those in the AFL-CIO. For example, there are a number of small independent unions that represent limited numbers of construction workers in a few localities. Independent, in this context, means the unions involved are not affiliated with the AFL-CIO. Most of these unions are organized along industrial lines without trade jurisdictions.

In addition, one of the largest union competitors to the AFL-CIO craft unions is the Construction Industry Conference of the United Steelworkers of America. This conference represents construction workers in many localities across the United States and Canada and is especially strong in the Appalachian coal areas. Most of the contractors who have labor contracts with locals of this conference are engaged in heavy and highway construction, or are specialty contractors. This conference does not divide its members into separate crafts or jurisdictions, and contractors can shift their workers from one occupational classification to another, so long as the workers are able to perform the work and are paid the wages which have been established for that classification through collective bargaining. Chapters of the locals forbid strikes without approval of the international union, members can transfer freely from one local to another, and union membership is open to anyone the contractor hires. Labor contracts with these locals specifically give contractors control over management of the work, assignment of the workers, source of the construction materials, and use of tools. Grievance machinery that can terminate in binding arbitration is written into all labor contracts.

In terms of total numbers, the AFL-CIO craft unions represent a very large majority of the organized construction workers. For this reason the discussion in the following sections pertains principally to those unions.

14.8 The Local Union

The basic unit of a construction craft labor union is the “local,'” with each local exercising jurisdiction over an assigned geographical area such as a borough, city, county, or state. The local serves as a headquarters for, and is responsible for, all union activities of that craft within its boundaries. The geographical area assigned to a given local can vary widely from one craft to another. For example, there may be an appreciable number of carpenters' locals within a given state but only a few locals of the plumbers' union.

The legislative body of local unions is the membership. Elected officers of the local have only the responsibility for carrying out union rules as ratified by majority vote of the members. Correspondingly, all matters of union policy, labor contract terms, decisions to strike, and other basic union issues must be approved by the voting membership.

Each local union elects its own officers, and these usually consist of a president, vice president, secretary-treasurer, and sergeant at arms. These officers may or may not be salaried, depending on the bylaws of the local. A typical arrangement is that the officers are paid only for the time that they actually spend on union business. An executive board or some equivalent body may also be established within a local, which is concerned primarily with the admission of new members, matters of discipline, financial matters, and contract negotiation. The day-to-day affairs of the local are managed by a paid business agent who is elected from the membership. The local is represented on each construction project by a job steward, who is expected to see that union rules are observed, and to report any violations or grievances to the business agent. The steward for each project is usually appointed by the local.

The locals of the same international union are commonly grouped together on a district, state, county, or city basis. For example, carpenters' locals within designated regions may band together to form district councils of carpenters, which serve to coordinate the activities of all member locals into a unified approach to common problems. Locals of the different construction unions unite on a regional basis to form building and construction trades councils. These councils consist of delegates from each member local and serve as agencies for regional cooperation. An important function of these councils is to present a united front to employers during periods of collective bargaining.

Over a period of years, the National Labor Relations Board (NLRB) and the courts have issued a series of landmark decisions concerning individual worker rights under the National Labor Relations Act (NLRA). These rulings pertain to the worker's association with a local union, and the mutual rights of each party. Certain of the most important of these findings are discussed in the next paragraph.

It has been held that a union member can be obliged to pay his local union only the prevailing dues and fees, and need not become a full member. Unions are prevented from requiring such a “dues paying only” member or “limited member” to take the union oath, or to accept full membership, or to attend union meetings. Unions may not fine full members who convert to limited status and work open shop or who return to work during a strike. After a union member resigns full membership, he can cross a picket line and return to work with no risk of union retaliation. Unions cannot impose fines to restrict a member's right to resign, even during a strike. A union cannot discipline a limited member who becomes a supervisor for an open-shop contractor.

14.9 Local Union Autonomy

The local is chartered by its international union and is subject to the constitution and bylaws of the parent organization. Beyond these provisions however, the decentralized nature of construction requires that locals possess a high degree of independence and freedom of action. Construction locals typically have the authority to negotiate their own labor agreements, and to call strikes, without the formal approval of their international unions. There are exceptions to this generality however, and the parent unions can restrain their locals from reckless actions regarding work stoppages and strikes. Locals cannot, for example, defy their international union with impunity, and strike at will. Locals do have considerable autonomy, but parental authority can be lawfully applied when the occasion demands. Each local has its own set of bylaws that governs the election of local officers, the ratification of labor contracts, conduct of meetings, payment of dues, admission and expulsion of members, and other union business.

14.10 Union Work Rules

Most local unions promulgate work rules that pertain to the employment of the locals' members, and negotiate for their inclusion in collective bargaining agreements with employers. These rules vary considerably from one craft to another, and also vary with geographical area. Some of the work rules represent concessions gained from employers in past collective bargaining, and pertain to a wide range of issues such as work hours per day, jurisdiction of work, multiple shifts, overtime and holidays, apprentices, prohibition of piecework, paydays, reporting time, foremen, crew size, crew mix, safety provisions and devices, tools, job stewards, and a variety of others. Contractors and others have often been critical of certain aspects of union work rules as being restrictive labor practices that unduly increase costs of production, prolong construction time unnecessarily, and interfere with the contractor's management prerogatives. Unions defend their work rules on the grounds that they make the employment of their members more secure, defend against the loss or subversion of hard-won gains, protect the members from unfair or arbitrary treatment by the employer, and ensure the safe employment conditions to which their members are entitled.

It can be said without doubt, that many work rules do function to preserve legitimate union rights and prerogatives. Unfortunately, many locals have shown little restraint in their imposition and enforcement of work rules. Examples include union insistence on the use of unnecessary workers on the job, prohibitions on the use of labor-saving methods and tools, inflexible application of overtime requirements, and other restrictive practices which have substantially lowered productivity and have commensurately increased construction costs in many sections of the country, especially the large metropolitan areas. Overlong coffee and lunch breaks, requirements that skilled workers perform unskilled jobs, strict and inflexible trade jurisdictions, flagrant featherbedding, excessive nonproductive time, limitations on the daily production of a tradesman, and the requiring of unnecessary work or the duplication of work already done, are additional examples of work rules that adversely affect both productivity and labor costs.

The work-rule environment has changed significantly in recent years, however. High construction labor costs are resulting in changes to faster and more economical ways to build. The shift to materials and processes such as drywall to replace plaster, precast concrete in place of cast in place concrete, and prefabricated steel buildings in place of structures where each structural steel member is fabricated and erected individually illustrates this point. In addition, the increase in the number of open-shop and merit-shop contractor operations across all parts of the country has resulted in a noticeable easing or elimination of restrictive work rules by many construction union locals.

14.11 The Business Agent

The local union elects a business agent, sometimes called a business manager, who conducts its internal business affairs and serves as the representative of the local union to outside agencies, including employers. He is paid for his services at the top rate for his craft. The business agent is the key person in a building trades local. As the full-time spokesman for the local, he has the primary responsibility for “policing the trade” within the assigned geographical area of the local. He refers union craft worker members to jobs, has considerable authority in determining who joins the union, and is clearly a powerful person insofar as both local contractors and union members are concerned.

Large locals may often have more than one full-time business agent; small locals may have one of their number act as a part-time business agent. The business agent is the contractor's only direct contact with a local union. The agent helps negotiate collective bargaining agreements, enforces the agreements after they are finalized, reconciles grievances, protects the union's work jurisdiction, and serves as a general intermediary for the local members and their contractor employers. The agent directs strikes and other concerted activities that are undertaken by the local. To the construction contractor, the business agent is the local union.

The business agent has substantial authority to make decisions for the local and bears almost the entire responsibility for the management of its affairs. Obviously, such freedom of action is a necessary condition in the construction industry, where jobs are scattered over a geographical area and can be of short duration. To be effective, the business agent must be empowered to act quickly and without having to await approval of a higher body. In a complex and shifting environment, he seeks to protect the interests of the local union and its members. Even though he can act freely however, he must remain responsive to the members of his local because he is elected by them, and his job depends on how well he meets the needs of his constituency.

The business agent is, in many respects, the middleman of the industry who strives to reconcile the conflicting demands of the employers on the one side, and the union rank and file on the other. Contractors look to the business agent to find qualified people for their projects and to assist with recalcitrant or troublesome workers. Members of the local depend on him for such services as finding jobs for them, and settling disputes with employers. He must manage his local's office, maintain the necessary records, and supervise the finances. He must also visit the jobsites and check on employer compliance with union work rules and contract provisions.

14.12 Collective Bargaining

Labor contracts between construction contractors and labor unions are obtained by a process of collective bargaining, and constitute the essential basis for labor-management relations in the unionized segment of the construction industry. These contracts, called collective bargaining agreements, are negotiated between the two parties, and establish wages, hours, and other essential conditions of employment within the geographical jurisdictions of the participating local unions, for the duration of the agreement. These agreements pertain only to the craft or crafts involved, whom the union represents. As existing labor agreements near expiration, negotiations are conducted to arrive at new, mutually acceptable contracts.

The NLRA and the NLRB require management and labor to bargain in good faith with one another in negotiating these collective bargaining agreements. Failure to do so by either party constitutes an unfair labor practice. The law does not require that concessions be made, or even that the two sides come to an agreement.

The law does not actually define what is meant by good-faith bargaining, although decisions of the NLRB and the courts have identified good-faith bargaining as a duty to approach negotiations with an open mind and a real intention of reaching an agreement. Lack of good faith on the part of the employer may be indicated by ignoring a bargaining request, conducting antiunion activities, failing to appoint a bargaining representative with power to reach an agreement, delaying and evasive tactics, attempting to deal directly with employees rather than with the union representatives during negotiations, refusing to consider each and every proposal, failing to respond with counterproposals, and refusing to sign an agreement.

14.13 Patterns of Bargaining

For many years, multiemployer collective bargaining was the standard method by which labor agreements were reached between contractors and the unions. In multiemployer bargaining, contractor groups or associations bargained with a union or unions on behalf of their members. The usual procedure was that the individual contractor authorized the association to bargain in its behalf by appointing the association as its bargaining agent and agreed to then be bound by the terms of the resulting labor contract. Such a negotiating procedure provided strength in numbers, and often improved the bargaining power of the individual construction firm. Additionally, this collective action prevented the unions from whipsawing one contractor against another. Local associations of general contractors typically negotiated with the locals of the basic trades such as carpenters, cement masons, laborers, operating engineers, construction teamsters, and ironworkers. The resulting labor contracts were often referred to as master labor agreements because they were multiemployer and multicraft in coverage.

The specialty contractor groups often negotiated with the union locals whose members they employed. For example, a city or regional association of painting contractors would negotiate with the appropriate local or locals of the International Brotherhood of Painters and Allied Trades. In a similar manner, locals of plumbers, plasterers, roofers, electricians, and the other specialty trades would bargain with organizations of their specialty contractor counterparts.

However, recent years have seen a trend toward individual contractors negotiating their own labor contracts. Although multiemployer bargaining is still very prevalent in the construction industry, collective action is frequently being replaced, especially in some geographical areas, by a more flexible free market concept of labor negotiations wherein individual contractors decide to negotiate with the craft labor unions one on one. A number of reasons have been cited for this trend. New construction management styles, new project delivery methods, periodic economic recessions, and the rapid growth of the open shop are believed by many to have triggered much of the change.

In addition, diverse groups of contractors, facing different economic problems, and having different viewpoints and different labor needs, being on the same side of the bargaining table have made multiemployer bargaining very difficult in some areas. Selective strikes by unions committed to multiemployer bargaining, and the use of interim, project, and national labor agreements have diminished contractor faith in and commitment to collective action.

Some work preservation clauses in labor contracts that contractors find unacceptable, have left many contractors even more reluctant to participate in multiemployer bargaining. Many contractors now consider multiemployer and multicraft bargaining to be unresponsive to market changes and modern industry conditions and perceive individual negotiations to be advantageous for them. Additionally, some contractors are reluctant to give power of attorney to trade organizations to bargain for them because they may wish to preserve their right to employ a nonunion workforce, or to perform work with nonunion craft workers in some areas.

A number of multiemployer bargaining units have been disbanded in recent years. In other cases, contractors authorize professional or trade association officers to negotiate agreements with the trades, but without the power to bind member contractors to them. Contractors are therefore left free to sign the resulting agreements or not, as they see fit. In many geographical areas, there is no association bargaining with some crafts.

In bargaining with the individual union locals, contractors can now attempt to confine the terms of a labor agreement to a specific marketplace. In bargaining one-on-one with the craft unions, construction firms find that they have the flexibility of avoiding a strike or accepting a strike, in order to gain concessions or to keep the work progressing at any price. This can sometimes be a matter of necessity for certain union contractors who are struggling to keep their share of the market. Negotiating one-on-one with the unions allows a firm to seek the best collective bargaining agreement it can negotiate from the trades, or to move to employing nonunion craft workers if the terms are not acceptable.

As can be seen, the overall present condition of collective bargaining in the construction industry is in a state of change. It remains to be seen what the results of some of the current trends and practices will be.

14.14 Withdrawal from Bargaining Unit

When a contractor withdraws from a multiemployer bargaining unit to engage in his own bargaining, he must take certain steps to avoid being obligated by future contracts negotiated by the bargaining unit and to avoid being penalized for withdrawing. In order to be excused from a bargaining agreement negotiated by the union and the multiemployer unit, the contractor must give written notice to the union and to the bargaining unit prior to the date set by the existing labor agreement for modification, or the agreed-upon date for the beginning of negotiations for a new agreement. The contractor's notice must indicate an unequivocal intent to withdraw from the multiemployer bargaining unit. Such notice should also be given to the Federal Mediation and Conciliation Service, which is further discussed in subsequent sections of this chapter.

An employer may withdraw from a multiemployer bargaining unit unilaterally by giving proper notice prior to the onset of negotiations, as described in the preceding paragraph, with emphasis on the fact that the contractor must provide clear notice of his intent to do so, prior to the onset of bargaining between the multiemployer unit and the union. Once bargaining commences, the right to withdraw is very limited. However, if the union concurs, the employer can withdraw at any time.

Even with timely notice, there is normally a continuing obligation for the contractor to bargain with the union, now doing so individually rather than as part of the multiemployer unit. The only way this requirement can be avoided, is for the contractor to demonstrate that the union no longer represents a majority of the employees concerned. If the contractor elects to withdraw from the multiemployer bargaining unit, he may retain a withdrawal liability to any multiemployer pension plan, under the provisions of the Employee Retirement Income Security Act (see Chapter 13).

14.15 The Bargaining Process

By terms of the NLRA, both management and labor can be represented by anyone of their own choosing at collective bargaining sessions. Individual construction firms are normally represented by company officers, perhaps supported by outside parties who possess expertise in construction labor law and labor relations.

Bargaining by a trade association is usually conducted by a committee of contractor members, legal or labor relations counsel, and association staff. The unions appoint the members of their negotiating team, usually officers of the locals, district councils, or building trades councils if multicraft bargaining is involved. Representatives of the international unions frequently assist the local unions and participate in the negotiations as well.

Almost invariably, the labor side opens the negotiations by demanding more than it actually expects to obtain. The resulting negotiating sessions usually follow a complex strategy of offer and counteroffer on the part of both sides. Experience and skill are required, to recognize the moment in the negotiations at which the best provisions can be agreed to. As a general rule, the union negotiators in these sessions do not have the final authority to consummate binding agreements, but must obtain ratification of the proposed collective bargaining agreement by the union membership following their bargaining sessions with management. It is not unusual for the union members to refuse to ratify the proposed settlement, sending the negotiators back to the bargaining table. In the event of an impasse in bargaining which cannot be overcome, there are various settlement plans in use about the country that assist contractors and unions toward reaching mutually satisfactory agreements without the necessity of resorting to strikes or lockouts.

It is absolutely essential that management realize when it enters these negotiating sessions, that it must be thoroughly prepared in every respect, and that it must negotiate with the assistance of expert and experienced labor law counsel. It must be remembered that the primary purpose of unions is to establish favorable working conditions for their members. The periodic negotiations with employers are the focal point for union activity and are not taken lightly by union representatives. By the same token, these negotiations are a serious matter for management also, and unsophisticated bargaining by poorly prepared management representatives can only lead to the contractors being outmaneuvered and outpointed by their union adversaries, who spend a great deal of their time in constant association regarding labor-management matters. The highly specialized art of labor negotiation has led to the increasing practice of hiring professional assistance for this purpose. Most large contractors and many of the contractor associations now retain labor relations specialists on their staffs.

14.16 Labor Agreements

Once a settlement is reached between a contractor and a labor union, a written instrument is prepared that contains the essentials of the agreement and is signed by the parties. This instrument is referred to as the collective bargaining agreement (CBA), or as the labor agreement or the labor contract, and is binding on both management and union labor in that jurisdiction. The life of a typical labor agreement may run from a short-term interim arrangement to a multiyear contract, as determined in the negotiations.

An interim agreement is used when an existing labor contract with a multiemployer unit has expired, and there is a bargaining impasse, and a new agreement has not yet been reached. Because the building trades union members will not usually work without a contract, an individual contractor may enter into an interim agreement with the labor union that will keep its projects staffed with craft labor, and allow construction progress to continue, until a new contractual arrangement is reached. Such an interim contract normally provides that the contractor will pay any final settlement retroactively, or will pay an interim wage negotiated with the union.

During recent years, the majority of labor contracts in the construction industry have been one-year settlements, although two-year and three-year agreements have also been negotiated. The longer-term contracts often provide for periodic pay adjustments or contain wage reopener or wage adjustment clauses.

Bargaining agreements in the construction industry contain many provisions and cover a very wide range of provisions. Such contracts stipulate wages, hours, fringe benefits, overtime, and a wide variety of working conditions. Most agreements are negotiated to cover a particular category of construction. For example, separate agreements are negotiated for the same geographic area between the same unions and different contractors or contractor groups to cover building, heavy, highway, and residential construction. Most agreements provide for the settlement of jurisdictional disputes, a job referral system, apprenticeship, and grievance procedures. A large proportion of construction labor agreements contain no-strike and no-lockout pledges. Many of the no-strike clauses are conditional, however, permitting strikes under certain conditions such as after the grievance procedure has been exhausted, or when the employer is in noncompliance with the provisions of the agreement.

The legislation that pertains to the provisions discussed in this section is the NLRA. The provisions that set forth the requirements for an employer who wishes to terminate or modify an existing labor contract are in Section 8(d) of the NLRA, which provides that the party desiring to terminate or modify an existing labor contract covering employees in an industry affecting interstate commerce must do the following:

1. Serve written notice on the other party of the termination or modification 60 days before the termination date or date of modification.
2. Offer to negotiate a new or modified contract.
3. Notify the Federal Mediation and Conciliation Service and any similar state agency that a dispute exists, if no agreement has been reached 30 days after the notice was served.
4. Continue to live by the existing contract terms without resort to slowdowns, strike, or lockout until expiration of the 60-day notice period or until expiration of the contract, whichever is later.

Any employee who engages in a strike within the 60-day period loses his status as an employee of the struck employer and is no longer protected by the NLRA. This means, for example, that employees who engage in strikes during this period are not entitled to reinstatement.

14.17 Geographical Coverage of Agreements

In terms of geographic coverage, labor contracts in the construction industry cover the spectrum, from some agreements that are national in their coverage to others that pertain to a single construction project. However, most of these agreements are local in their coverage, with their application ranging from cities to entire states.

14.18 Project Agreements

Union labor agreements called project agreements have become more commonplace in recent years. A project agreement is a labor contract that normally applies only to a specific construction project, usually a large job. However, in some cases such labor contracts may apply to a series of projects in a given geographical area, or even to projects of a specific industry.

These labor agreements commonly contain special conditions that pertain to a single project, which are different from those in the collective bargaining agreement for the geographic area. Such agreements have the goal of constructing projects efficiently, on time, and with reasonable and predictable labor costs. Such contracts frequently require that all subcontractors be union, and include applicable local wage rates and fringe benefits, but attempt to reduce labor costs and ensure uninterrupted work by sometimes including special terms that are more favorable to the contractor than the existing local labor agreements. To illustrate, project agreements often prohibit strikes, lockouts, and slowdowns. They can contain grievance procedures, ban jurisdictional disputes, reduce or eliminate coffee breaks, reduce overtime, provide for employment of trainees, and eliminate travel time and standby crews. They often allow the project to continue work through local collective bargaining strikes under interim agreements.

Although some local contractors who are signatories to the local agreement may object to project agreements that provide special terms and special treatment to others that they do not receive, project agreements are still widely used. The growth of open shop has spurred the usage of project agreements because they can help to improve the competitive position of unionized firms. The unions have even sometimes entered into project labor contracts with otherwise nonunion contractors to capture work for union members that would otherwise be performed by nonunion craft workers.

14.19 National Agreements

The term national agreement has come to refer to a nationally applicable labor contract that is negotiated between the AFL-CIO international building trades unions, and certain individual contractors and contractor associations. A national agreement provides for the employment of the members of a given union anywhere within the United States, and often in Canada. Employers who sign national agreements are mainly large industrial contractors who perform work in widely scattered locations. Rather than attempt to become parties to the myriad of local labor contracts in effect in different locations about the country where they may be performing work, these contractors and the union use the national agreement as a convenient method of handling their labor relations.

The usual national agreement does not include any of the terms and provisions of local labor contracts but does provide that all workers must be obtained through local union hiring halls. Usually, contractors can hire their field supervisors directly. Typically, these agreements contain explicit work rules, often including provisions that specifically ban slowdowns, standby crews, and featherbedding practices. A grievance procedure, as well as provision for flexible eight-hour workdays, are often included.

National agreements often contain a no-strike, no-lockout clause, although an exception to this provision allows for support of local collective bargaining. These pacts also usually eliminate coffee breaks and other nonworking time, travel and subsistence pay, and overtime except under unusual circumstances. The agreement establishes a joint administrative committee that adapts the agreement to suit the conditions of a specific project. The committee establishes wage rates, alteration of workweek, and numbers of preapprentices and helpers to be allowed, and other matters to more closely tailor the scope of the national agreement to the conditions of a particular project or location.

14.20 The Federal Mediation and Conciliation Service

Established by the Taft-Hartley Act in 1947, the Federal Mediation and Conciliation Service is an independent agency of the federal government that is charged with the responsibility of assisting employers in interstate commerce and labor organizations in promoting labor peace. As discussed in a previous section of this chapter, employers or unions who wish to modify or terminate existing collective bargaining agreements must serve notice on the other party 60 days before the effective date of these changes. Should the matter not be resolved within 30 days, notice to the Federal Mediation and Conciliation Service is required, as well as to any similar state agency having jurisdiction. The service is also notified when negotiations threaten to lead to a dispute.

Absolute neutrality in labor disputes is a guiding principle of the service. For the parties to a labor negotiation, agreeing to submit to mediation by the Federal Mediation and Conciliation Service is generally a voluntary process, although there are a few exceptions. The parties to a dispute are encouraged to settle their differences by themselves, but either side may request a mediator's assistance at no charge. The aim of the service is to reconcile conflicting views without intervention or dictation into the affairs of either party. Mediators cannot compel either side in a labor dispute to do anything, but they do bring their experience and dispassionate advice to the bargaining table in order to help the disputing parties reach a mutually acceptable area of agreement. Thus, the Federal Mediation and Conciliation Service functions to keep the parties bargaining, offers helpful suggestions, and otherwise assists in the ultimate achievement of collective bargaining agreements. In no way altered, however, is the fact that the resulting agreement is both the product and the responsibility of the signatories.

The service employs a staff of mediators who are located in regional offices throughout the country and who are recruited from both management and labor. Through the years the Federal Mediation and Conciliation Service has established a reputation for impartiality and devotion to duty while occupying a sometimes difficult role. As a general rule, the service concentrates its energies on the resolution of disputes that have an appreciable impact on interstate commerce. In a dispute that threatens to cause a substantial interruption to commerce, the Federal Mediation and Conciliation Service may enter the dispute either on its own motion or on the request of one or more of the parties to the dispute. In disputes that imperil the national health or safety, the service must by law intervene. Should the parties agree to arbitrate their differences the service will furnish them with a list of qualified arbitrators.

14.21 Employer Lockouts

A lockout occurs when an employer or, more commonly, an association of employers close their establishments against employees during negotiations, and cease operations until a settlement has been reached. A strike is the withholding of workers from the contractor until a settlement is reached. A lockout is an employer device to withhold employment from its workers until an agreement is achieved. Employer lockouts have sometimes been referred to as strikes in reverse.

Labor's right to strike or to engage in concerted activity for bargaining purposes is protected by law. The law does not, however, directly provide employers the parallel right to engage in a lockout. Federal labor law does not expressly permit or forbid lockouts, and such lockouts are legal under certain circumstances that are not spelled out in the law. The NLRA gives workers the right to bargain collectively and makes it an unfair labor practice for employers to interfere with that right. Hence, it is up to the NLRB and the courts to decide whether a particular lockout constitutes “interference.” The guideposts to legality are vague, and contractors who engage in protective lockouts assume the risk of having to prove that the circumstances justified their actions. Competent legal counsel is highly desirable for contractors who contemplate such an action.

Over the years, some guidelines have emerged that are generally useful in judging the legality of a lockout action. Based on precedent, the following can be said to be circumstances that could justify a lockout:

1. Unusual economic circumstances exist such that a strike would cause substantial loss to the contractor.
2. Circumstances where a strike would pose a serious threat to the public health and welfare.
3. A lockout by members of an employer association is necessary to prevent “whipsawing” by the union.
4. A union is engaging in selective strikes against individual members of an employers' association.

In addition, the U.S. Supreme Court has held that the lockout is a valid counterweapon after an impasse has been reached in a bargaining dispute, even if the employer is not anticipating an immediate strike. The lockout cannot be used in situations in which there is antiunion intent, but is lawful for use only in support of a legitimate bargaining position as an economic tool to counter a union's strike weapon. The NLRB has held that multitrade contractor groups acting in concert does not render a lockout illegal, so long as the interests of the employers involved are sufficiently interwoven to justify their taking concerted action in their common interest. The NLRB has also ruled that it is legal for an employer to hire temporary workers during a lockout of its regular employees. This decision says that a contractor does not violate current labor law by hiring temporary replacements during a lockout in order to keep construction operations progressing.

14.22 Wages and Hours

Details associated with craft labor wages and hours are generally the pivotal bargaining issues in the negotiations for a collective bargaining agreement. The negotiations on other issues typically are very much secondary in nature. Actually, wages and hours are broad subjects, covering such considerations as hourly wage rates, fringe benefits, overtime rates, show-up time, designation of premium time, additional compensation for working at heights, travel time, subsistence allowances, apprentice wage rates, and cost-of-living wage escalators.

It is usual practice for overtime rates to be required for all hours worked in excess of 8 hours per day, 40 hours per week, and for work done on Saturdays, Sundays, or holidays. Overtime rates are normally one and one-half times the regular rate of pay, although “double time” pay may be stipulated in some agreements. Many union contracts now allow four 10-hour workdays without payment of overtime.

Travel time and subsistence are often included, and usually pertain to projects located in remote areas. Most bargaining agreements establish a mechanism for determining the status of a given project. If a job is found to have a remote classification, special rules apply regarding contractor-furnished transportation, field camp facilities, payment of subsistence, and travel reimbursement.

During periods of inflation, cost-of-living adjustment often referred to as “COLA clauses” are commonly included in construction labor contracts. In an attempt to protect the purchasing power of their members during such times, the unions often negotiate contracts that automatically adjust wage rates for inflation or for increases in the cost of living. The most commonly used measure of the rate of inflation is the Consumer Price Index (CPI), which is published every month by the Bureau of Labor Statistics for selected cities, and for the country as a whole. Changes in the CPI, expressed in either index points or percentages, are the typical basis for calculating periodic wage changes in collective bargaining agreements.

The rapid growth of open-shop work has served generally to abate the historic steady increase in negotiated union wage rates in recent years. In many cases, the wage rates of organized construction workers have been reduced or held steady with no increase. Where increases have been negotiated, the changes have generally been relatively small. Of course, general economic trends and the volume of construction work being performed are also moderating factors that affect the ability of organized labor to seek wage rate increases for craft workers.

14.23 Administration of the Labor Contract

The signing of the negotiated collective bargaining agreement does not close the matter of contractor-union relationships. Rather, the status of the agreement merely changes from that of negotiating for the terms of the labor contract, to one of interpretation and administration of the agreement. A carefully considered and clearly worded contract will do much to minimize subsequent misunderstandings regarding the contract.

Labor agreements in the construction industry typically contain procedures for the settlement of disputes that may arise during the life of the labor contract. When a dispute occurs that cannot be resolved by a conference of the steward, business agent, superintendent, and any other party directly involved, the grievance procedure that has been set forth in the agreement is followed. This procedure often provides for meetings between successively higher echelons of contractor and union officials, and typical provisions are that during this time no work stoppage is to occur. Should the grievance procedure not resolve the dispute, arbitration of the matter may or may not be provided for in the labor agreement. Historically, unions have resisted the concept of binding arbitration, preferring to remain free to select their own course of action to suit the situation. Nevertheless, many construction labor contracts now provide for the arbitration of contract disputes with no option to resort to strikes or lockouts.

It is worthwhile to note that an agreement to arbitrate can be enforced against either contractors or unions by a federal court injunction. The law on this matter with respect to management has been long established. In 1970, the U.S. Supreme Court reversed an earlier ruling that the Norris-LaGuardia Act barred federal court injunctions against labor unions and ruled that injunctions could be issued on complaint of employers to enforce no-strike agreements to arbitrate.

When a labor contract is signed, the contractor is obligated to comply with the terms of the agreement, and he must be insistent that the unions do the same. Because administration of labor contracts is an everyday requirement for the union contractor, a carefully selected individual is usually designated within the contractor's organization whose responsibility it is, to handle the labor relations for the firm. When a specific person is assigned to this duty, even if this duty is one of several responsibilities, he or she can become versed in the complexities of labor law and the provisions of the local labor agreements. This person becomes, in fact, the labor relations specialist for the company. In this way the labor policy of the company can be consistent and informed.

14.24 Damage Suits

Section 301 of the Taft-Hartley Act provides that suits for violation of labor contracts between an employer and a labor union representing employees in an industry affecting interstate commerce can be brought in the federal district court having jurisdiction. The law provides that any employer or labor organization subject to the Taft-Hartley Act is bound by the actions of its agents, and that a labor organization may sue or be sued as an entity and on behalf of the employees whom it represents. Any monetary judgment so obtained against a union is enforceable only against the organization as an entity, and not against any individual member of the union. The U.S. Supreme Court has ruled that an employer can sue a union for damages resulting from violation of a no-strike arbitration agreement, but may not sue union officials or members individually.

Damage suits for losses suffered as a result of unlawful strikes, picketing, or other union actions may also be brought into federal courts under the provisions of the Taft-Hartley Act. Section 303 of this act establishes the right of an employer who is injured in his business or property by a secondary boycott, hot-cargo agreement, jurisdictional dispute, or other unfair labor practice, to sue the responsible union or unions for damages. Additionally, any injured party, not just the employer against whom a strike or boycott is called, is entitled to bring suit for damages which are sustained through unlawful union action.

14.25 Prejob Conferences

When employment conditions pertaining to a given union project are out of the ordinary (that is, the conditions are not clearly provided for in the local agreement), it is common practice for a prejob conference to be held between the contractor and the union or unions involved. This meeting may be held before bidding, so as to establish standard conditions for the bidding contractors, or may be held prior to the start of field operations. In either case, the underlying motive is to achieve a meeting of the minds between the employer and the unions regarding specific job conditions of employment.

For example, consider a job that is to be located in a remote area. The contractor wishes to provide the necessary labor in the most economical manner possible, and the unions require that fair standards be maintained. If the project is near a town of any size, the contractor may decide to quarter its workers there and furnish transportation back and forth to the site. If this solution is not feasible, temporary barracks or trailers may be provided for the craft workers at the project location. The contractor and the unions must arrive at a mutually acceptable understanding with regard to quarters, subsistence pay, and transportation. In addition, the locals having jurisdiction must be queried in order to determine whether they have sufficient workers available to staff the remote project with craft workers. If not, arrangements must be made to bring in workers from the outside, on the part of either the local union or the contractor.

There has sometimes been some degree of contractor resistance to the use of the prejob-conference concept, based on the belief that such meetings can encourage the unions to make exorbitant demands because of an unusual situation. However, it has often been found that unions may be much more reasonable when approached at this stage than they may be at a later date, when they become aware of the unusual conditions and come to believe that the contractor is not maintaining fair standards for the craft workers. Obtaining advance union acceptance of the contractor's proposed procedures can generally be said to make it much easier for the contractor to devote its energies to getting the project completed, rather than having to combat active union resistance and interference because the union is working to mitigate what it believes to be an encroachment upon the fair treatment of workers.

14.26 The Merit-Shop Contractor

A merit-shop contractor, also referred to as an open-shop contractor, is one who is not a signatory to a labor agreement with a construction union or unions, and who hires its craft workers from the open labor market. This type of employer hires its employees and contracts with subcontractors without regard to their union or nonunion status. A merit-shop contractor recruits, hires, trains, promotes, disciplines, and discharges its employees in accordance with its own company policies and procedures. It is up to the employer to establish its own pay rates and fringe benefit plan. Additionally, the merit-shop contractor establishes its own company policies with regard to working conditions and work rules for craft labor.

Because the merit-shop contractor has no ready-made source of construction labor, it must make an extra effort to obtain, train, and retain its field forces. This requires a company labor relations policy that helps the new employee get to know and understand the company and to engender a feeling of personal involvement and belonging. Because the contractor is free from union trade jurisdictions, open-shop firms have created new occupations combining different construction types, and helpers are widely used for routine and unskilled work.

Although merit-shop pay rates are, on the average, somewhat lower than union scale, continuity of employment and the fact that union dues are not required, provides the nonunion craft worker with an annual income that is frequently much the same as, or sometimes better than, that of his union counterpart. Open-shop contractors may employ union and nonunion workers alike. They oppose union make-work rules and strict trade jurisdictions, and maintain that every contractor should have the right to deal with any other contractor or business firm, union or nonunion, as it may choose. The open-shop concept defends the right of the contractor to manage its projects and to establish and maintain workplace practices for its craft labor.

For example, merit-shop contractors decide for themselves what the size and composition of work crews will be, and they make the determination regarding the jobs or tasks to which a worker can be assigned. They are free to use prefabricated materials as they choose, and are not subject to jurisdictional disputes, featherbedding practices, forced overtime, or work slowdowns. They pay workers according to the ability and performance of the craft workers. Workweeks of four 10-hour days without payment of overtime are common on projects constructed by open-shop contractors.

Merit-shop contractors have complete freedom with regard to the manner in which they deploy field personnel. Unhampered by union rules, they can assign workers according to the needs they have determined, and can utilize labor efficiently. When the level of company employment is down, skilled personnel can be assigned to lower task levels, thus keeping key workers employed by the firm until the work volume again increases. Open-shop contractors can pay a broad range of wages to journeymen and helpers of different levels of skill and experience, while the union employer is bound to pay all workers of a given trade classification the same wage.

14.27 Sources of Open-Shop Labor

A common problem faced by open-shop contractors is obtaining adequate numbers of skilled workers. Of necessity, the open-shop firm must recruit its work force through more informal channels than does its unionized counterpart. Through the medium of hiring halls, the construction unions act as brokerage agents to provide unionized contractors with the needed skilled labor on a consistent and dependable basis. Moreover, union apprenticeship programs assure that when a journeyman is dispatched from the union hiring hall, he or she has the requisite skills of the craft. Nonunion companies do not have such a centralized recruitment mechanism available to them.

Open-shop contractors now use a variety of procedures to assist them in obtaining their craft labor. Open-shop apprenticeship and training programs on a company-wide, and regional, and national basis, are now producing substantial numbers of skilled tradesmen. Open-shop firms often maintain a network of informal worker contacts, mostly through their project superintendents and crew foremen. Many such firms cooperate with one another by lending and trading workers and information about workers among themselves as their individual needs dictate.

14.28 Apprenticeship Programs

Traditionally, apprenticeship programs in the construction industry have been a joint effort between individual union-shop contractors or local chapters of contractor associations and the AFL-CIO building trades unions. A National Joint Apprenticeship Committee for each craft is responsible for developing suggested national training standards for that craft. The actual employment and training of apprentices is essentially a local matter supervised by local joint apprenticeship committees that are comprised of both contractor and labor union representatives. Most union labor agreements contain provisions for apprenticeship training. These programs are typically funded by a “cents per man-hour worked” payroll fee that is paid by the signatory contractors into an apprenticeship fund.

In 1971, however, the Bureau of Apprenticeship and Training approved national apprenticeship standards for the employees of open-shop contractors. This was the first time unilateral apprenticeship programs were approved on a national basis and placed under the direct supervision of employers only. Consequently, independent programs can be registered when the sponsors decline to participate in existing local joint training programs of the union.

For local programs to be approved by and registered with a state apprenticeship council or with the Bureau of Apprenticeship and Training, the operating standards adopted by the local body must meet certain criteria. In general, a construction trade requires two to four years of on-the-job training and a minimum of 144 hours a year of related classroom instruction. Apprentices can be indentured to an individual contractor or to a multiemployer organization. Many apprenticeship programs, both union and open-shop, are sponsored by contractor organizations such as the Associated General Contractors of America, Associated Builders and Contractors, National Association of Home Builders, and many other national employer organizations. It is important to note that apprenticeship wage rates on Davis-Bacon projects can be paid only to workers who are participating in a certified training program.

Federal regulations designed to increase minority-group participation in apprenticeship programs by requiring unions and contractors to go beyond passive nondiscrimination have been in effect for some years. These regulations require that apprenticeship programs accept sufficient numbers of minority-group apprentices to make the racial composition of the local labor force reflect the racial mix of the community. In addition, special apprenticeship programs are in operation to accelerate the entry of women into the building trades. Unions and/or contractors operating apprenticeship programs must have a positive affirmative action plan covering all phases of the program including recruitment, admission, and selection of minorities, and underrepresented groups, and women. Compliance reviews are made, and noncompliance can lead to deregistration of the apprenticeship program or prosecution under the provisions of the Civil Rights Act.

The Bureau of Apprenticeship and Training has approved the “Model for Unilateral Trainee Program Standards” as prepared by the Associated General Contractors of America and the “Wheels of Learning” training materials of the Associated Builders and Contractors for use in unilateral (no union participation) apprenticeship programs. These modular materials allow competency-based rather than time-based training. The use of these programs allows apprentices to complete each phase of their training by demonstrating their competence and abilities rather than spending a prescribed number of hours in the program. The competency-based format can appreciably reduce the length of the traditional apprenticeship period. However, competency-based training must be approved by the local Bureau of Apprenticeship and Training office, or by the state apprenticeship council if there is one. It is also important to note that job safety is now integrated into all apprenticeship and training programs.

In some union-conducted apprenticeship programs, the unions have their apprentices sign a promissory note for each year of training, a debt that can be repaid by working for union contracting firms. To make it more difficult for nonunion contractors to hire skilled union workers, the union may charge apprentices for the cost of their training if they work for an open-shop firm within a stated period of time following the completion of their apprenticeship program.

14.29 Nonapprenticeship Training Programs

There are a variety of programs that are designed to train construction industry workers, which do not follow formal apprenticeship procedures. There are publicly funded plans at both the federal and local level designed primarily to train minority youths, women, and unemployed workers, veterans, underrepresented groups, etc. These programs concentrate on hands-on, preapprenticeship preparation and the upgrading of existing skills. In addition, many vocational-technical schools provide construction-related instruction.

Privately supported and conducted training programs are largely concentrated in the open-shop segment of the construction industry. Classroom instruction, on-the-job training, and a variety of other teaching media are utilized by different training programs.

Additionally, some contractors conduct their own in-house training programs. These include all types of training in curricula of varying styles and scope of coverage. Many of these contractor efforts involve intensive specialized instruction to develop craftsmen who are highly skilled in a particular type of work. Large open-shop contractors often make a heavy investment in their manpower training. This involves diverse forms of training geared to the needs of specific job requirements.

Many local chapters of the Associated Builders and Contractors and the Associated General Contractors of America have programs that train people as helpers. These are on-the-job procedures that prepare workers to fill jobs in support of skilled craftsmen. Chapters of several contractor associations sponsor programs that offer specific task and cross-craft instruction.

14.30 Supervisory Training

In addition to providing craft worker training, many contractors, as well as a number of contractor and subcontractor professional associations, are now offering training in the supervision and management of construction projects. Founded on the principle that supervision and management require the development of skills and abilities which are different from the technical skills of craft workers, and based in the notion that effective management of craft labor on construction projects is critical to the success of projects and the profitability of contractors, these programs utilize a variety of methods to make construction workers aware of, and proficient in, the workings of supervision and project management. These programs are discussed more fully in Chapter 9. It should also be noted that some construction craft unions, recognizing that their journeymen often advance very rapidly into supervisory roles or foreman roles today, are also participating in some of these programs, and/or are offering such programs as a component of apprenticeship training.

14.31 Present Construction Industry Status

During the past 20 years or so, the construction industry has seen a profound shift in some locations, away from union shop operations and toward open-shop contracting. Despite opposition from the labor unions, an increasing proportion of construction work today is being performed by open-shop or merit-shop contractors. A variety of statistics published by the Bureau of Labor Statistics, which is a division of the Department of Labor, can be consulted for documentation of these facts (http://www.bls.gov/).

One of the reasons for this unprecedented transition has been the loss by unions and union contractors, of much of their traditional competitive advantage. A marked decline in worker productivity, coupled with high wage rates, expensive fringe benefits, restrictive rules on apprentices and helpers, inefficient work rules, and jurisdictional disputes that are contained in many collective bargaining agreements today, have left many union firms no longer competitive, and have contributed to the shift to open-shop. Some contractors believe that overly rigid labor agreements have made it difficult or impossible for union contractors to exercise sufficient effective management control over their craft workers and their field operations.

A swelling of the ranks of nonunion construction firms and workers, along with disenchantment on the part of some construction craftsmen with the unions, have contributed to the rapid growth of open shop contracting. Some union construction craft workers have sought employment with nonunion firms. This phenomenon has also been enhanced by the fact that some owners are seeking out nonunion construction firms to perform the work on their projects because they believe this may result in lower cost and fewer job delays.

It should be noted with regard to the general trend toward increased open-shop contracting, that there are appreciable differences among states, regions, and local labor markets with respect to this shift. There are still many areas, especially those large cities that have long been the citadels of construction union power, where open-shop penetration has been limited or nonexistent. In addition, the Davis-Bacon Act and many state prevailing wage laws have operated to offset the open shop's cost advantages on public works. For many years, Davis-Bacon administrative procedures often required that open-shop contractors pay the equivalent of union wages. Also, Davis-Bacon generally uses union craft designations and excludes from its wage categories the helper, trainee, and preapprentice labor classifications that open-shop contractors utilize so effectively. Such prevailing wage laws have effectively forced open-shop operators to adopt some of the more costly practices of their union competitors on public projects. Hence, to date, open-shop work has not made a strong entry into the public sector. However, recent modifications in state laws and new Davis-Bacon regulations may portend change in this situation.

During the past several years, the Associated Builders and Contractors (ABC), an organization founded on the principles of merit-shop construction, has become a large, and active, and effective national organization, advocating open-shop construction contracting. This organization now has chapters in all parts of the country and provides its members with a variety of valuable services. Furthermore, more than 50 percent of the members of the traditionally union-oriented Associated General Contractors of America (AGC) now operate as open shop or dual shop contractors. The AGC now offers its members a full line of open-shop services.

14.32 Dual-Shop Operation

A number of construction contractors operating under union labor agreements have found that their labor costs have made them noncompetitive for work in certain categories, or in some geographical areas. To solve this problem without changing to an open-shop operation, some construction firms have chosen to form and operate a second company that is open shop. The original union-shop firm continues to function in those areas where unions are strongly entrenched, and the nonunion firm does business where open-shop work has become established. The NLRB has approved such “dual-shop,” or “double-breasted,” operations when certain conditions are met.

It is of great importance to a contractor establishing a dual shop to avail himself of expert labor law counsel in order to assure that the open-shop operation is properly established, and that the two companies are sufficiently separate in management and operation so as to qualify for separate employer status as defined under federal labor law. If the two firms are found to actually be a single employer, or if the nonunion firm is found to be the “alter ego” of the union company, the open-shop company can be held liable retroactively for underpaid wages and delinquent fringe benefit payments under the original company's collective bargaining agreement. Additionally, the employees of the open-shop firm could then be placed under the jurisdiction of the original company's labor contract, with very costly consequences. In addition, a breach-of-contract suit or unfair labor practice charge could be filed by the union.

The principal factors that the NLRB considers in deciding whether sufficient separation exists between the two businesses include:

1. Interrelationship of operations.
2. Centralized control of labor relations.
3. Common management.
4. Common ownership or financial control.

The factors most emphasized by the NLRB in its analysis of the company are operational integration and control of labor relations. The main criterion for a double-breasted operation is that there must in fact be two separate and independent business entities, each of whose labor policies are conducted without interference from the other. This requires that the two companies be independent in their day-to-day operations and also in their labor relations policies. The usual procedure employed by companies has been to establish separate corporations (not wholly owned subsidiaries or divisions) with each having separate management, field supervision, work forces, equipment, and financing.

The NLRB, with court approval, has held that common ownership does not, in itself, dictate an illegal status of dual operations when there is no common control of labor policies. The general rule is that two commonly owned corporations in a double-breasted operation are considered to be two separate entities under the National Labor Relations Act if there is no direct control from one company over the other with regard to day-to-day operations or labor relations. The principal consideration is that independence of labor policy makes the two act as different employers and, as such, employees of each constitute a separate bargaining unit. When each company is a separate and independent entity, each is entitled to the same protection against secondary boycotts and to the same protection from one another's labor controversies. Competent legal advice is certainly a necessity for any contractor contemplating double-breasted operation, or considering changing from union to nonunion status.

The dual-shop concept is, understandably, opposed by the construction unions. As a part of their continuing efforts to inhibit the growth of dual shops, some labor unions have sent questionnaires on this subject to their signatory contractors. The purpose of such questionnaires is to determine the extent to which a union firm may be operating, managing, or controlling a nonunion company arm. The U.S. Supreme Court ruled in 1983 that such a union request for information from a union contractor concerning the existence or the workings of a dual-shop arrangement cannot be refused. To do so is regarded to be an unfair labor practice and a failure to bargain in good faith.

In a move designed to keep the nonunion part of a dual-shop company from being able to compete effectively, many local unions negotiate “work preservation clauses” into their labor contracts. These clauses extend the terms of a labor agreement to any business entity with which a signatory contractor may have direct or indirect management, control, or majority ownership. Such a clause requires the nonunion arm of a dual shop to conform to all of the terms of the labor contract pertaining to the union half. Thus, the work preservation clause requires that both companies are bound to the same union wage agreement for all work done within its geographical jurisdiction.

14.33 Union Reaction to Open Shop

The construction unions have not taken the trend to nonunion employment lying down. In an effort to halt the open-shop tide and to regain lost ground, the building trades unions have taken a number of countermeasures.

Some of the steps taken have been purely defensive, concentrating on restrictive strategies to lock in the union market. As noted in the previous section, a vigorous effort to restrict or eliminate the dual shop has been under way for some time. Broad restrictions of many kinds on the subcontracting of work to nonunion firms are being included in negotiations for labor contracts. Strong political pressure is being exerted to prevent further revision or repeal of the Davis-Bacon Act. The unions display opposition to any change being made to existing apprenticeship procedures or program classifications, and support fully withdrawal liability for contractors who withdraw from multiemployer pension plans, which can make it difficult for a union contractor to change to open-shop status. At times, union pension, health, and welfare funds have been used to finance projects, where the construction of the project has been restricted to union contractors.

The unions have also frequently reflected a much more moderate attitude regarding collective bargaining and have at times made sincere attempts to improve the cost-effectiveness and the competitive position of unionized construction contractors. Recent years have seen some important changes in labor contract provisions. Wage reductions have been made at times, and wage freezes have become fairly commonplace. Where wage increases have been negotiated, they have often been much more moderate than in past years. Fringe benefits have been subjected to the same treatment. Wage rates for overtime have been reduced from double time to time and a half for Saturdays as well as weekdays. Shift-work clauses now allow some crafts to work in shifts at round-the-clock sites at straight time pay. The requirement for standby crews has been eliminated in many cases. Limitations have been placed on travel and subsistence pay, show-up pay, nonworking foremen, minimum crew sizes, and rules regarding crew composition.

Many labor contracts now include strict no-strike–no-lockout provisions. Many unions have dropped the all-union or all-nonunion job concept in favor of accepting a mix of union and nonunion contractors and subcontractors on a given jobsite. Some unions now allow the use of more apprentices on jobs as well as subjourneymen and preapprentices or helpers. Many restrictive work rules and jurisdictional conflicts have been eliminated and steps have been taken to provide more jobsite flexibility to the contractor. A concerted effort is being made to avoid job delays, strikes, picketing, and work stoppages on union projects.

A conscious joint effort is being made in many cases, by union labor and management to reduce or eliminate the adversarial relationship between unions and employers. Joint committees conduct regular meetings seeking to resolve common concerns. A real effort is being made to open lines of communications and improve common understanding. Joint public relations programs, designed to improve the public perception of unionized construction and to apprise users as well as the public of the advantages of union-built jobs, are under way.

14.34 Summary and Conclusions

The heart and soul of a construction project, and of the operations of a construction contracting company as well, are the skilled working people, the craft workers who actually perform the work of construction. Small wonder then, that the content of this chapter has addressed itself to ways and means by which construction contractors go about the matter of effectively providing for and managing their most important, and most complex, and most valuable resource, the skilled and talented craft workers who perform construction work.

Chapter 14 Review Questions

1. Define dual shop operation and state a synonym by which it is known. Is a dual shop operation legal? Explain.
2. Define the following and discuss their roles: union steward, union business agent.
3. Define open-shop contractor.
4. Define merit-shop construction contracting, and name the contractor trade association that promotes this practice.
5. Define national agreements and project agreements, and discuss their use.
6. Discuss the role of the Bureau of Apprenticeship and Training in assisting with training of construction craft labor.
7. Is it possible for a contractor to withdraw from a multiemployer bargaining unit? Explain.
8. Discuss the origin, evolution, and current role of the AFL-CIO.
9. Define, and explain the role of, the CBA.
10. What are the most prevalent issues to be negotiated in a collective bargaining agreement?