The Louisiana construction industry expects 2010 to bring a bonanza in federal recovery projects. But many New Orleans contractors fear new rules instituted by the Obama administration will open the door to organized labor and shut out nonunion contractors.
Speaking in September before the AFL-CIO Constitutional Convention in Pittsburgh, Secretary of Labor Hilda Solis made clear where the administration stands on project labor agreements, which call for awarding contracts to unionized firms for large federally funded projects.
"We know that they are a win-win, good for workers and for contractors," Solis said. "Project labor agreements improve the economy and efficiency of construction projects. We have been working very hard at (the Department of Labor) with Vice President Biden and the Middle Class Task Force to ensure that project labor agreements are really encouraged and used. "
Angela Latino-Geier, president and CEO of the New Orleans chapter of Associated Builders and Contractors Inc., sees the push for PLAs as a potential job and recovery killer.
"We've been free of labor activity like this for over eight years, and now we're starting to see it coming back more and more," Latino-Geier said. "The more regulations and restrictions in place, the higher the cost of projects and the more difficult it will be for smaller contractors to get work. The lack of progress we've made in rebuilding could be worsened by these efforts. "
When President Bush took office in 2001, he signed an executive order banning the use of PLAs on federal and federally funded construction projects.
PLAs require construction firms bidding on a project to agree to a collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project. Nonunion contractors and subcontractors are not excluded from the bidding process, but they must abide by agreed-upon labor standards.
Obama promptly overturned Bush's order banning PLAs when he took office in February.
Organized labor hailed the decision, with Mark Ayers, president of the AFL-CIO Building and Construction Trades Department, calling it "one of the first steps in ushering in a new, more pragmatic and value-conscious approach to governing. For more than 70 years before the Bush order, project labor agreements benefited communities, employers and workers by ensuring fair wages and benefits and on-time completion of projects. "
PLAs assure the hiring of local residents and create outreach programs designed to offer local residents the opportunity for a career in the skilled trades, Ayers said.
Construction industry officials insist it will have the opposite effect and severely impact right-to-work states such as Louisiana, where union labor is hard to come by.
Nationally, 85 percent of the construction work force is nonunion. In Louisiana, that figure climbs to 96 percent, according to ABC. If the federal government starts to impose PLAs on projects requiring union involvement, it could freeze Louisiana contractors out of the running for the flood of work expected to come online next year, said Ben Brubeck, ABC director of labor and federal procurement.
"Louisiana may not have enough union workers to do the work, so out-of-state union members might get bused in and get preference over nonunion, in-state workers," Brubeck said.
The ABC's New Orleans chapter receives at least one call a week from out-of-state contractors looking for work.
"Their economies are worse than ours so far as the construction industry, and they're desperate for the work we're seeing here," Latino-Geier said.
PLAs also might scare off contractors from bidding for federal projects if they have never dealt with labor unions before, said Ken Naquin, CEO of Louisiana Associated General Contractors.
"With the amount of federal work the city of New Orleans is seeing come to fruition with schools, the Corps of Engineers, more street and sewer work, if those federal funds have PLAs tied to them, it will change the landscape of the contracting community in New Orleans and Louisiana," Naquin said. "Contractors that have historically been open shop will have to negotiate wages and benefits with unions. It's a whole new ball game. "
The impact of Obama's PLA order likely won't be felt until 2010. He signed the executive order in February but it has yet to be implemented as it moves through the regulatory process, including a period for public comments that ended in September, Brubeck said.
During that time, Sen. David Vitter, R-Metairie, introduced the Government Neutrality in Contracting Act, which would make Bush's ban on PLAs law. But it is most likely dead in the water, Brubeck said.
"I can't see Obama signing a bill that overturns his own executive order," he said.
The push to open construction projects to organized labor is not limited to federal projects. The Orleans Parish Criminal Sheriff's Office "recommends" that those contractors that want to bid on its upcoming kitchen and warehouse project enter into a labor peace agreement and abide by prevailing wage requirements.
The labor peace agreement calls for the contractor to recognize the right of its employees to select a labor organization to act as their representative. The employer is to provide the labor organization with the names and addresses of its nonsupervisory employees and allow the labor organization time to meet with the employees on site.
The sheriff's office did not respond to requests for comment.
"This is a sign of the times," Latino-Geier said. "This is becoming more normal, trying to put that type of language in projects now. There's a strong push to get nonunion contractors to hire union workers. "
Not every contractor sees that as a bad thing.
Boh Bros. Construction is one of the largest employers of union construction workers in the state and is in a good position to take advantage of federal projects that call for project labor agreements, President Robert Boh said.
"Fifty to 60 years ago, when unions first came into being in the industry, we went that way and we never changed," Boh said. "Most of our competitors in the early '80s shifted from being almost completely union to almost completely open shop. We were one of few to keep those agreements and work with labor to come up with wages and working conditions and benefits for our employees that were good for them but also gave us an ability to be competitive.
"Whether this benefits us, I don't know, but it certainly won't be a problem. But others will view it as something they'd rather not get mixed up in even for one job. "