Building and Construction Trades Council of Metropolitan District v. Associated Builders and Contractors of Massachusetts Rhode Island, Inc Massachusetts Water Resources Authority v. Associated Builders and Contractors of Massachusetts Rhode Island, Inc, 507 U.S. 218, 113 S.Ct. 1190, 122 L.Ed.2d 565 (1993) , affectionately knows as Boston Harbor, is the seminal Supreme Court decision that held that the National Labor Relations Act (“NLRA”) does not preempt government mandated project labor agreements (“PLAs”) if the government entity is acting as a market participant rather than a market regulator.  Boston Harbor has led to many believing that virtually all PLAs are legal when the government agency is a project owner or if the PLA involves a private project.  However, does Boston Harbor really cut that far?

In short, no.  The primary issue in Boston Harbor was one of preemption.  The Supreme Court addressed whether the NLRA preempted state and local laws and ordinances mandating PLAs.  On that narrow issue, the Supreme Court said there is no preemption if the government is acting as a market participant.   What the Court did not address is whether other federal statutes invalidate PLAs.  Specifically, whether PLA’s can run afoul of Section 8(e), the so called “hot cargo” provisions, of the NLRA.

Under Section 8(e) “”[i]t shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or cease doing business with any other person.”  Virtually all PLAs require any contractor or subcontractor working on the project to sign a letter of assent or that prohibit subcontracting work to any contractor that refuses to sign the letter of assent.  The Courts and the Board have held that such clauses violate Section 8(e) unless the clauses fall within the so called construction industry proviso.

The construction industry proviso states “[p]rovided, [t]hat nothing in this subsection shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work.”  Therefore, for the statutory exception to apply there must be two things (a) the counter party to the agreement must be a “construction industry employer” and (b) the restriction must be limited to the site of the work.

But there is a third non-statutory prong that must be met.  Under the Supreme Court’s decision in Connell Construction Company, Inc v. Plumbers and Steamfitters Local Union No 100 8212 1256, 421 U.S. 616, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975) even if the counter party is a “construction industry employer” they still must have a bargaining relationship with the union.  In that case the Court held that the an agreement between a general contractor and a group of building trade unions violated Section 8(e) because, although Connell was a construction industry employer, the unions did not seek to represent any of the general contractors employees.  Similarly, most, if not all, private project labor agreements that I have reviewed contain an express disclaimer that the agreement does not apply to any employees of the private developer.

On this framework, in 2006, in the Labor Board held that a private project labor agreement between the Glen Falls Building & Construction Trades Council and a private developer of a co-generation electric power plant violated Section 8(e).
Glens Falls Bldg. & Constr. Trades Council & Int’l Union of Bricklayers & Allied Craftsmen, Local Union No. 6 & Int’l Bhd. of Carpenters & Joiners of N. Am., Local Union No. 229 & Int’l Ass’n of Heat & Frost Insulators & Asbestos Workers, Local Union No. 40 & Int’l Ass’n of Bridge, Structural & Ornamental Ironworkers, Local Union No. 12 & Laborers, 350 NLRB 417 (2007).  There, the Board held that because the Building Trades did not seek to represent any of the owner’s employees, the PLA violated Section 8(e) and was not saved by the construction industry proviso.

Finally, may PLAs state they apply to non-construction industry employers, like construction material, ready-mix concrete, and hot mix asphalt suppliers.  These are always invalid because the Board has ruled that Section 8(e) prevent application of the union subcontracting provisions in a PLA to these firms namely because this is work that is not being performed at the “site of construction” and that these firms are not “construction industry employers.”

The Takeaway

If you are a merit shop contractor faced with a private project labor agreement you should consider filing an unfair labor practice charge with the Nation Labor Relations Board, especially with a current Republican majority at the Board.