Often construction unions will force ask non-union construction firms to hire a union worker for employment on a construction project where the non-union firm is completing work. Faced with the threat of a picket line, many contractors consider the employment a minor tax inconvenience in exchange for labor peace and decide to hire the union worker. After all, what is the worst that could happen when employing one worker on a project that will be completed soon? In short, plenty, including inadvertently becoming bound to the terms of a union’s collective bargaining agreement and owing union benefits funds significant sums.
First, unions may ask you to sign a “letter of assent.” or some other agreement when you agree to bring on an union member to your job site. This agreement needs to be reviewed carefully because it may reference that you are agreeing to be bound by the terms of the collective bargaining agreement, which may you never have seen let alone read.
Second, several courts have held that you can become bound by the terms of a collective bargaining agreement without signing anything “rather [a]ll that is required is conduct manifesting an intention to abide and be bound by the terms of an agreement.”
The Third Circuit case of New Jersey Reg’l Council of Carpenters v. Jayeff Const. Corp., shows how you can end up on the wrong end of a lawsuit by a union claiming your firm owes it benefits pursuant to a collective bargaining agreement it never signed.
In that case, the Court explained that Jayeff is a commercial construction contracting company that hires subcontractors to work on its projects. Jayeff was a merit or open shop contractor which means it is not signed to a collective bargaining agreement, does not hire employees through a local union hiring hall, and it does not require employees to join or financially support a union as a condition to employment. However, Jayeff made the mistake of employing members of the Carpenters’ Union on certain projects. The Court found that between 2003 and 2009, Jayeff voluntarily remitted fringe benefits for five employees who were members of the Carpenters’ Union. None of these individuals performed carpentry work for Jayeff but were, instead, employed in managerial positions.
In 2009, the Carpenters’ Union alleged that Jayeff should have made fringe benefit contributions on behalf of all its employees, not just the five members of the Carpenters’ Union and claimed Jayeff owed the Union over $250,000. A protracted legal dispute lasting over three years ensued. Ultimately the Third Circuit ruled in favor of Jayeff finding its action did not demonstrate an intent to be bound by the CBA. However, victory for Jayeff undoubtedly came at the cost of significant legal fees and the stress of dealing with this litigation for multiple years both of which could have been avoided by simply not agreeing to hire Carpenters’ Union members.
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
