Port Of Long Beach Project Labor Deals Spark Debate Over Provisions
Harbor Commission Was Expected To Vote Yesterday, July 2, On Middle Harbor, Bridge Labor Agreements
By Sean Belk - Staff Writer
July 3, 2012 – If the Long Beach Harbor Commission approves two major project labor agreements (PLAs) this week for the largest construction work in the Port of Long Beach’s history, all contractors awarded for the jobs must hire union workers, a provision that has become a highly controversial issue.
Since some commissioners have suggested supporting a blanket PLA that would cover all port construction, some small, local firms that typically don’t pay into unions have raised concerns with the agreement and fear they may not be able to bid on projects.
“What about the little guy?” states a July newsletter from the Westside Project Area Council (PAC), a group of mostly neighboring businesses, located just blocks away from the port, that originally formed as part of the city’s now defunct redevelopment agency.
The harbor commission was scheduled to vote yesterday, July 2, as the Business Journal went to press, on two separate PLAs: one for the $650 million design-build contract of the Gerald Desmond Bridge replacement project; and another for the North Middle Harbor Redevelopment Projects, which is the third such PLA for the $1.2 billion Middle Harbor project.
The group, however, states that PLAs, “still allow the small businesses to bid on jobs, be awarded jobs and use their existing staff.” But non-union representatives say PLAs still discriminate against non-union firms and limit their ability to compete in the marketplace.
Local city officials and union representatives support PLAs because they say the agreements encourage local hiring, ensure workers get medical benefits and make sure projects are done on time and under budget.
The labor deals were worked on with the Los Angeles/Orange Counties Building and Construction Trades Council and other craft unions. The bridge PLA is expected to cost the port $1 million to $1.5 million to administer, while the Middle Harbor agreement will add on about $781,033 to the project.
The new proposals come just a few weeks after the harbor commission hosted a study session on a proposed “blanket” PLA, covering all port construction work over the next decade, similar to the neighboring Port of Los Angeles. That proposal has not been voted on yet. But the meeting drew a divided, standing-room-only crowd, with speakers making cases both for and against the plan.
Daniel Yi, the port’s spokesperson, told the Business Journal that going forward with a port-wide PLA would be at the “full discretion of the harbor commission,” and it’s unknown where the entire commission stands. However, he assured that port staff would make sure any blanket agreement wouldn’t conflict with existing Gerald Desmond Bridge and Middle Harbor PLAs.
Provisions for the bridge PLA include: “no pickets, no strikes, no lockouts, no slowdowns; a 5 percent or more goal for utilizing Veterans and disadvantaged workers; paying prevailing wages; drug and alcohol testing; and a dispute and arbitration process,” according to a port staff report.
Port staff said that the bridge PLA could not, however, require local hiring goals, due to government regulations regarding federal funding. The new Middle Harbor PLA, however, includes a 30 percent local hiring provision since it is being funded mostly by port capital funds. The local hiring goal refers to hiring residents in Los Angeles and Orange counties, not in Long Beach, port staff said.
What is allowed for both PLAs, though, is that, in exchange for other provisions, all contractors must agree to a compromise by using a certain number of union workers, regardless if the business is union or not, port staff said.
Provisions allow non-union contractors to retain a maximum of five “core workers,” that may be selected using a prescribed ratio of core and union-hall workers. Any workers needed after that, however, would have to be all from union hiring halls. All non-union contractors and their workers would be required to pay into craft union benefit trusts, and union workers would be required to receive health benefits, pensions and vacation/holiday contributions.
The union hiring requirement, however, has worried several small businesses, most of which don’t use union labor, according to the Westside PAC newsletter. If approved, the union hiring provision would stand, requiring all subcontractors to sign a “letter of assent,” agreeing to hire union workers for any growth in the workload over and above their current staff.
Port officials, however, have assured the group that non-union firms would still be able to bid on the projects, and most projects don’t call for more workers than a firm’s staff level, said Lee Adams, a coordinator for Westside PAC. “They’re trying to come to some happy compromise where everybody gets a shot at least of bidding on the work,” she said. “I think if they do follow the model that has been set for the two existing PLAs for Middle Harbor . . . that would leave a nice amount of room for small business to still be a viable player.”
Also weighing in are Long Beach city councilmembers, a majority of whom favor the labor agreements, stating that the main goal is to make sure projects are done “on time and under budget,” while providing job opportunities through local apprenticeship programs.
Eric Christen, executive director for the Coalition for Fair Employment in Construction, said, however, the debate is not about whether non-union firms are able to bid on projects, but whether it’s fair to require contractors to change their business models to fit terms that favor unions in order to be selected.
Local, small businesses should be “terrified” if the PLAs are approved, he said, adding that awarded firms are required to sign on to union master agreements and union schedules, while being responsible for “underfunded” pension plans that workers will be required to pay into. Christen, in an e-mail sent to local media, called PLA provisions, “blatant, wasteful and unnecessary.”
“It’s completely disadvantageous to anybody that isn’t a union member, which is most of the industry,” Christen said. “They can absolutely bid on these contracts and once they do, and they’ve got the devil in the details, God help them . . . because they are going to lose complete control of their business.”
Additionally, he said Harbor Commissioner Rich Dines, the former president of Southern California District Council of the International Longshore and Warehouse Union (ILWU) Local 13, and a member of the Pacific Maritime Association as a longshoreman, should bow out of voting on the PLAs all together. Christen claims that Dines’ unions are affiliated with the American Federation of Labor and Congress of Industrial Organizations, or AFL-CIO, of which the construction trades also are members.
Although it’s unclear whether Dines has a conflict of interest in voting on the matter, he said the connection certainly gives the appearance of one. “What I found in the past is that anybody who even has a hint of conflict of interest tends to take themselves out of it,” Christen said. “Technically, whether they have to do it or not is another question.”
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