Court Upholds BCTC City-Wide PLA’s

On May 4th the United States Court of Appeals for the 2nd Circuit upheld the right of New York City to enter into city-wide project labor agreements. The ruling was a significant blow to the adversaries of the unionized building and construction industry and in particular Local 3. The organizations who originally filed the lawsuit and the appeal on Wednesday, February 29, 2012, were the Building Industry Electrical Contractors ­Association and United Electrical Contractors Association. They appealed to the ­Federal Appeals Court, the Southern District of New York’s decision which denied BIECA/UECA their claim against the Building and Construction Trades Council of Greater NY (BCTC) and New York City.
In the original decision, the Court failed to uphold BIECA/UECA’s claim that the PLA entered into between the Bloomberg Administration and the BCTC was in violation of law. It alleged the PLA’s “constitute an impermissible attempt to regulate labor relations in the construction industry. It also alleged the PLA’s are in violation of the National Labor Relations Act and state competitive bidding law.
In their appeal before the Federal Appeals Court they continued to argue the same issue. At the time of the oral arguments it appeared the Court was not very sympathetic to the appeal. The May 4th decision confirms the Court was not. It rejected all the arguments of BIECA/UECA and reaffirmed the right of the BCTC and New York City to enter into project labor agreements as long as the City was entering into such agreements as a customer and not as a regulator.
The BIECA/UECA attorneys were asked to demonstrate how this case was any different from other PLA’s which have been determined to be legal; why the BIECA contractors could not ­negotiate terms with the representative of their employees that would permit them to bid on the PLA’s; do the PLA’s prohibit them from bidding on non-PLA projects and isn’t it a fact that it is their own relationship which they voluntarily entered into with the present representatives of their workers that limits their ability to bid on PLA’s and not the PLA’s themselves? The Appeal Court rejected all their rationales. In response to the argument that BIECA would have to renegotiate their existing collective bargaining agreements the Court said, “...the “requirement” that they renegotiate their CBA’s—is entirely self-inflicted. BIECA is free to renegotiate its CBA with Local 363 and it other signatory unions. BIECA is equally free to decline work on City PLA projects and continue to work under its existing CBA’s on other ­private projects, or on City projects not covered by the PLAs.”
In defense of PLA’s, the City argued to the Court that the City did not enter into PLA’s to regulate labor relations, but to save costs as a participant in the market pointing out the City obtained no-strike provisions and avoids the application of the Wicks Law by entering into the PLA’s.
BCTC argued to the Court that BIECA/UECA engaged in speculation about the City’s motivation to enter into the PLA’s and that the District Court Judge properly dismissed the allegations as not being plausible; that it is the Local 363 CBA not the PLA’s that may limit BIECA’s participation in the PLA’s; and that the PLA’s with the City are basically the same as PLA’s with private developers. The Appeal Court concurred.
Responding to BIECA/UECA’s allegation that the PLAs were in reality “political favoritism” the Court stated, “It bears repeating that BIECA’s theory of the case is preemption: that the PLAs are not contracts but regulations and therefore are preempted by the NLRA [National Labor Relations Act]. It is hard to see why, even if political favoritism was a motivating factor in the City’s decision to contract with particular contractors or unions, the PLAs would be thereby transformed from contracts into regulations.... We are quite certain that Congress did not intend for the NLRA’s or ERISA’s preemptive scope to turn on state officials’ subjective reasons for adopting a regulation or agreement.’
In conclusion the Court stated, “In the absence of any express or implied indication by Congress that a State may not manage its own property when it pursues its purely proprietary interests, and where analogous private conduct would be permitted, this Court will not infer such a restriction. The PLA’s challenged here represent the City’s permissible proprietary choice; the City has behaved just as any other major landowner or developer might to secure labor for many of its construction projects. Because the PLA’s are market activity and not regulation, the preemption claim must fail.
The judgment of the district court is therefore AFFIRMED.”