Union/developer negotiations getting tougherBy: Gregory Zeller
July 18, 2012
But as construction trades struggle to find their post-recession footing, negotiations between labor unions and developers have taken a contentious turn - depending on whom you ask. Some front-line generals insist unity, not unrest, defines these contract conflicts, but other insiders cite increasing hostilities between strong-arming unions and greedy owners. At heart is the developer's economically challenged bottom line, and the laborer's willingness to make cost-cutting concessions.
A good example of the contract-by-concession process - and the different perspectives the opposing sides can have - came in May, when the 1,500 members of New York City-based Metallic Lathers and Reinforcing Ironworkers Local 46 approved a 15-percent wage-and-benefits cut, among other work-rule concessions. The reductions, made to appease developers facing lower profits, were nothing new, according to Jim Castellane, president of the Building and Construction Trades Council of Nassau and Suffolk, who told LIBN in June, "Our guys have sacrificed more than any other sector."
This week, Castellane said he didn't want to offend any other union or "make anyone think we're doing more or doing better than anyone else," but noted the average construction-union member faces unique challenges, particularly in this economy.
"Everyone knows the construction industry is different," Castellane said. "We pay hourly into a fund for vacations, we pay hourly for our retirements. When we make concessions on a labor agreement, that's a sacrifice that's made by the individual worker, coming right out of his pay." Such sacrifices are acceptable to union members, he added, because they understand the symbiotic relationships between worker and developer.
"We're very cognizant of the fact that we need developers here on Long Island," Castellane noted. "We need to keep them competitive, so we can keep our guys working and earning a living. These 'Project Labor Agreements' always result in a considerable savings for the developer, and we make that sacrifice graciously."
What Castellane isn't mentioning are the other parts of Project Labor Agreements - or collective bargaining agreements on conditions and pay for individual projects - that include provisions dissuading developers from hiring non-unionized labor. This benefits the union, but according to Ruth Mulford, Long Island/Metro regional vice president of Empire State Associated Builders & Contractors, it also significantly increases project costs.
"The unions make 'concessions' by forcing developers to sign a Project Labor Agreement ... that promises 'labor harmony' on the job," Mulford said. "That means there won't be any pickets or other disruptions during the job. This is not really a concession, since the unions would be the ones picketing."
Meanwhile, that same PLA "virtually eliminates non-union contractors from bidding the work," which "increases the cost of a public project (up to) 20 percent," she added.
Some developers won't play ball. Many "turn to the non-union sector," according to Mulford, "where they can get their work done less expensively and without the costly work rules." While Local 46 is hardly the only union to cut wages to remain competitive, not every laborer's coalition has bit this bullet.
"Many developers have asked unions for concessions, since the margins of profit are smaller due to the economic climate," Mulford said. "Most unions have refused."
Castellane sees it differently. Many construction unions make "competitive concessions ... to be competitive and keep the developers competitive," he noted, and most developers appreciate the gesture.
"They're happy we're willing to do this," Castellane said. "It makes for a stronger partnership. It can be contentious sometimes when we're negotiating, of course ... but when we get there, we shake hands and move on. It's a win for all of us."
Such diametrically opposed spins are simply the nature of high-stakes back-and-forth bargaining, according to John Durso, president of the Long Island Federation of Labor, AFL-CIO, who defined compromise as "everyone leaves the table a little unhappy."
Durso agreed that for the most part, construction unions are usually more willing than developers to compromise, but "at the same time, no one is willing to give up everything that they've gained over decades of struggle."
"Employers always demand more, and this recession has just made it that much harder," he said. "But every union that I know, from the building trades to the public sector to the private sector, is willing to cooperate and work closer with employers in recognition of the weakness of our economy."
If the nature of bargaining between workers and owners hasn't changed, the recession has clearly redefined the negotiation parameters.
"It has always been tough to negotiate," Durso said. "The problem comes when someone wants to take advantage of this recession and tries to undermine the sanctity of a union contract, gut its safety provisions and drive down the quality of the work to make a bigger profit."
Mulford - who noted that new technologies are allowing smaller, non-union companies to complete "large-scale projects ... at 20- to 30-percent savings" - said the willingness of unions to make concessions is a recent phenomenon wrought by the recession, and said worker organizations that don't cut costs will lose jobs "to the more flexible non-union companies."
"Many companies and unions struggle with change," Mulford added. "If they don't, however, they may no longer exist when things turn around."
That's a concept not lost on the unions, Castellane noted, and precisely why so many, like Local 46, are accepting lower wages.
"We know we need those developers, we need those contractors," he said. "We can't do this without them."