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Groups Warn That City Could Face Suit

Elizabeth Dobbins edobbins@lowellsun.comMay 24, 2019

LOWELL — Two groups representing non-union construction industry interests sent letters to city officials this week warning that signing a Project Labor Agreement for the Lowell High School project could result in litigation.

The letters from Merit Construction Alliance and the Massachusetts chapter of Associated Builders and Contractors, Inc., follow last week’s contentious City Council meeting that saw union workers fill City Council Chambers calling for officials to endorse this type of agreement.

A Project Labor Agreement, or PLA, is a collective bargaining agreement with labor organizations made before hiring.

Proponents say it will be a chance to ensure the project stays on-time and on-budget, provides apprenticeship opportunities and sets minimum percentages for certain types of workers, such as union laborers, Lowell residents, people of color, women and veterans. Opponents say it will increase costs, cause delays and functionally bar non-union laborers from working on the project.

On top of this, in their letters, Merit Construction Alliance and the Massachusetts chapter of Associated Builders and Contractors, Inc., highlight litigation, which has historically followed these types of agreement.

Central to both sides’ arguments is a 1999 decision by the Supreme Judicial Court of Massachusetts.

In the case, seven non-unionized contractors sued the city of Malden, which was soliciting bids from contractors for a $100 million project to build five new schools. The non-unionized contractors alleged that Malden, by requiring the successful bidder sign on to a PLA, was violating competitive bidding laws.

While the court ruled in favor of Malden, it described the size, duration, timing and complexity of the project as factors that justified the use of the PLA.

Recently this case was cited in the city of Worcester’s deliberations on whether to use a PLA in its construction of a ballpark. A study by Skanska USA Building, Inc. — which is also the owner’s project manager on the Lowell High School project — highlighted a passage from the court decision that said “in most circumstances, the building of a single school will not, in and of itself, justify the use of a PLA.”

Gregory Beeman, president and CEO of the Massachusetts chapter of the Associated Builders and Contractors, Inc., said he believes it’s unlikely Lowell High School project meet the requirements laid out in this decision.

“In my view it’s more likely it would not meet the Supreme Court criteria than it would,” he said.

Beeman said a PLA would drive up costs by reducing the number of contractors that would bid on the project, in turn reducing competition and the incentive to submit low bids.

He said the PLAs he is familiar with in the state of Massachusetts have included requirements to hire union workers, making these projects unattractive to contractors that typically use non-union workers.

“All of the trade labor has to come through the construction unions, so that really is not a workable scenario for a non-union contractor,” he said. “They hire their own workers. They do not use unions as their source of labor. It’s just that it’s a different world.”

Frank Callahan is the president of the Massachusetts Building and Trades Council, which represents unions and their contractors. He argues the Lowell High School project does meet the requirements laid out in the Malden case, even if it is a project for a single school.

He said the expense of the project and the scheduling complexity, especially in terms of the effects of construction on students still studying in the building, make it a candidate for a PLA.

“Clearly the Lowell project meets those parameters,” he said. “It’s going to be the largest public high school project in Massachusetts history. It’s going to be over a four-year project and it’s going to be a very complex project.”

Callahan disagreed a PLA would put Lowell at legal risk.

“People can threaten to sue you for all kinds of things, but I don’t think it has any merits,” he said.

He said a PLA is not exclusively about ensuring union employees work on a project, but allowing the city to set hiring requirements for women, veterans and other groups.

“People think this is just about making it a union job and that’s not simply what it’s about. ... It’s more about what we’re allowed to put into a project labor agreement that benefits the community, in this case Lowell,” Callahan said.

Both Beeman and Callahan said other ways of ensuring percentages of workers from certain groups are employed on a project have been the subject of litigation. In Merit Construction Alliance’s letter to the city, it cited a 2001 state superior court case, which struck down a requirement in Lowell for a third of all hours on public work projects to be conducted by city residents.

Callahan referenced these lawsuits as a reason to support PLAs. Beeman holds PLAs are primarily about unions and said these other hiring requirements can be met by union or non-union contractors in several ways.

In the past 10 to 15 years, few, if any PLAs have been used in public school projects in the state of Massachusetts.

Callahan said this is because school projects, unlike Lowell High School, have not been large enough to warrant PLAs. Beeman disagreed with this reasoning. He said the Malden decision, new regulations and procedures making contractors easier to compare and increased public knowledge and skepticism of PLAs have reduced their implementation.

Both Merit Construction Alliance and Associated Builders and Contractors, Inc., have been involved in lawsuits over PLAs in the past. Representatives from the groups did not confirm whether they were planning to sue Lowell if it signs a PLA on the high school project.

“I just bring it up because I think it’s important to show there’s a history of case law that does not support PLA,” Kauppi said, noting that while his organization has sued in past cases, individual contractors could also sue.

Beeman said he could not give a firm answer on the lawsuit question as the board running his organization has not met since the PLA was proposed for the high school project. He said the topic will be discussed at their next meeting in early June.

“Anytime there is a PLA that puts such real and significant restrictions on our members’ ability to bid on public projects we’re going to look very seriously on what options we have to address it,” Beeman said.

Last week, City Councilors tabled a vote on a potential feasibility study on entering into a PLA and asked City Manager Eileen Donoghue to provide more information on the proposal at a future meeting.

This week Donoghue said she hopes to have a report for City Council at the next meeting on Tuesday night. She said she believes the city may be at risk of litigation if this type of agreement is approved.

“Certainly that’s a concern and there’s an indication there would be a high likelihood that the city would be sued,” she said.

Follow Elizabeth Dobbins on Twitter @ElizDobbins

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