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Sometimes it seems as though we’re in one endless election cycle, but the truth is that it’s been awhile since there’s been an election more important to ABC members than the one coming up on November 4th.
For eight years, ABC and the open shop have been closed out of the governor’s office. During the administration of Deval Patrick that has translated into union-only project labor agreements, licensing boards packed exclusively with union members and other attempts to force us to operate under the union model. Only the outstanding work of our government affairs team has kept things from being even worse.
But we are confident that November 4th will be the beginning of the end of that era. We have developed strong relationships with both of the major party candidates for governor Martha Coakley and Charlie Baker.
As many of you know, the attorney general’s office is just as important to ABC members as the governor’s office. Prevailing wage enforcement, bid protests and many other matters that are important to the construction industry are under the control of the AG. We are also working to develop a relationship with Maura Healey, who is the favorite to replace Martha Coakley as attorney general. The fact is Healey is not beholden to the unions or anyone else for her significant primary win. We’ve talked with her on the importance of a level playing field and a fair chance for open shops to compete, and we believe she approaches our issues with an open mind.
ABC members will be holding fundraisers for some of the candidates for important state offices. We hope you will keep in mind that what happens on November 4th will have a strong impact on your business and do your part to support our cause.
And no matter which candidates you prefer, let your voice be heard on November 4th, and encourage your employees to do the same. As we have long said at ABC, “Get into politics or get out of business.”
At its September meeting, Associated Builders and Contractors of Massachusetts board of directors voted to join a coalition of more than 40 construction industry and other groups that is working to defeat a question on the November ballot that would end the recently adopted practice of indexing the commonwealth’s gas tax to inflation. We decided to join the coalition because we believe the ballot question’s passage would have a devastating impact on the construction industry and on future public and private development in Massachusetts.
In 2009, Massachusetts passed an historic set of transportation reforms that included eliminating the Turnpike Authority, reforming MBTA pensions and health care, and ending the use of capital funds to pay for operating costs. The clear message was that elected officials wanted to see reforms implemented before any new money was dedicated to transportation.
Once the reforms were put in place, a 2013 law increased revenues dedicated to transportation by about $600 million annually. A number of measures were enacted to pay for the increased investment, including a three-cent hike in the gas tax (the first since 1991) and indexing the tax to the Consumer Price Index.
Increased transportation investment provided a huge boost to the construction industry at a time when private investment was scarce and the industry was struggling. It also spurred private investments that would not otherwise have been made.
Indexing the gas tax to inflation is a critical piece of the finance plan that ensures a stable, revenue source for enhanced transportation investments that will keep pace with the cost of doing business. Eliminating the provision would reduce those investments by around $1 billion over the next decade.
The ABC board recognizes that with the rise of hybrid vehicles and federal laws that will require improved fuel efficiency, the gas tax is not a permanent solution to Massachusetts’ transportation funding needs. We believe it is important that we, together with our partners, work toward a more permanent solution that funds infrastructure investments through the state budget, not taxes. But that solution will take time. In the interim, we believe that ensuring a reasonable level of transportation investment is critical to our industry and the commonwealth.
The coalition has hired a firm to run the ballot campaign and anticipates it will need to raise $3 million to be successful. ABCMA will match member contributions to the effort up to $10,000. If you plan to make a contribution to the campaign, please let us know so we can match it. Thank you for your membership and support for our efforts.
Regulators at the National Labor Relations Board (NLRB) Have Reissued a Proposed Rule on Ambush Elections
Last month the National Labor Relations Board (NLRB) reissued the so-called ambush election rule that would curtail the ability of non-union employers and employees to oppose union organizing drives.
A nearly identical rule was issued in 2011 but struck down the following year because a federal judge ruled that the NLRB didn’t have a quorum. Only two of the board’s five seats were filled at the time. Now back at full strength, the NLRB approved the rule on a 3-2 vote.
In addition to reducing the period of a standard union election process from 42 days to as little as 10 days, the rule would:
- Require employers to file a formal Statement of Position within seven days or forfeit the right to pursue any issues.
- Force targeted no-union employers to turn over employee information such as home addresses, e-mail addresses, home phone numbers and cell phone numbers to the union to facilitate contact.
- Eliminate the required 25-day waiting period prior to the holding of an election.
- Allow workers at a given site to cast ballots even if their eligibility is contested, deferring any legal action until after the election.
- Eliminate an employer’s automatic right to a post-election NLRB review of contested issues.
In effect, where a union would have months and even years to build support at a given work site before approaching the NLRB to supervise an election, an employer would have at most a few weeks to offer any responses. This rule change would especially hurt small businesses, which typically do not employ a labor issues counsel.
House Bill 3695, which would expand the Boston Convention and Exhibition Center (BCEC), has received a favorable recommendation from the state legislature’s Committee on State Administration and will next go to the floor of the House of Representatives. The problem is that the bill includes a project labor agreement (PLA) that would require everyone who works on the project to go through union hiring halls.
Thanks to ABC’s hard work, it has become very rare for the legislature to approve PLAs in recent years, but this bill is particularly difficult because the original 1997 legislation to build the BCEC included a PLA. Please contact your state representative and let him or her know that it’s not fair to essentially exclude 80 percent of the Commonwealth’s construction workforce from working on this massive project. Let them know that as long as there is a PLA on this job, open shop firms will NOT be able to use their own employees as they normally do – instead they would have to go to the union for workers. This would be like telling the Red Sox that they have to go the Yankees for all of their players.
If you need further information or who your state representative is please contact Chuck Borstel at email@example.com , thank you.
Department of Labor Standards issues opinion letter expanding prevailing wage to offsite pre-fabrication work
A new Department of Labor Standards opinion letter broadens prevailing wage to include some work that isn’t performed at the jobsite. The letter identifies this work as “custom pre-fabrication work, specifically, the off-site assemblage of architecturally custom-designed components of building systems that traditionally were constructed on-site.”
“We are concerned about this change, and believe the state needs to hear from the industry on the ramifications of what could be a significant and costly expansion of prevailing wage into many forms of off-site work,” said ABC MA President Greg Beeman. ABC and several of our allied associations have requested a meeting as soon as possible with the Department of Labor Standards and the Executive Office of Labor.
We believe that controlling high business costs is one of the keys to maintaining the competitiveness of the Massachusetts economy. We will continue to monitor the problem and hope to have more to report soon, but as of now, this new letter represents state policy.
On behalf of the Massachusetts Chapter of Associated Builders and Contractors (ABC), its 400 member companies and their 25,000 employees,we would like to register our support for the following bill:
- Senate Bill 146, An Act relative to preventing discrimination on certain boards of registration (Tarr)
ABC supports Senate Bill 146. There are certain requirements for membership on one of the trade boards at the Division of Professional Licensure, Electricians, Plumbers and Sheet Metal workers. Each board member is appointed by the sitting governor.
Currently, there are no restrictions regarding whether the appointee is a union member or part of the open shop. Without such a provision, these boards run the risk of discriminating against one or the other by allowing boards to be entirely made up of members from one sector, which is not a true representation of the industry they govern. This makes it virtually impossible to consider the entire industry’s concerns in their deliberations about regulations or other matters that come before the board. To shut one sector out of important industry decisions amounts to a grave injustice. This bill would require the governor to ensure that both sectors are represented on each trade board.
We respectfully request that the committee report out Senate Bill 146 favorably.
On behalf of the Massachusetts Chapter of Associated Builders and Contractors (ABC), its 400 member companies and their 25,000 employees who embrace the merit shop philosophy, ABC presented the following testimony to the state administration committee on October 22, 2013.
Project Labor Agreements
- House Bill 2801 An Act to encourage economic competition (Fattman)
- House Bill 2824 An Act relative to the use of project labor agreements (Jones)
- Senate Bill 1547 An Act justifying the use of project labor agreements (Tarr)
- House Bill 2823 An Act requiring government neutrality in all public construction projects (Jones)
- Senate Bill 1541 An Act requiring government neutrality in all public construction projects (Tarr)
Each one of these bills addresses the use of project labor agreements (PLAs) on public construction projects. PLAs exclude the vast majority of the construction industry by requiring all labor to come from unions. Only 16 percent of Massachusetts construction workers belong to unions.
Whereas PLAs exclude open-shop construction companies and workers, union contractors are free to bid and participate under open bidding without PLAs. When a PLA is placed on a public project it reduces competition, thus resulting in higher costs for Massachusetts taxpayers.
Since the Massachusetts Supreme Court has addressed the use of PLAs in public construction, we believe it is appropriate for the Legislature to do so as well. These bills give the committee several options, including codifying the Supreme Court ruling in statute, and we respectfully ask that the committee consider them and take action to reinforce the value of open and competitive bidding in the Commonwealth
The Definition of Fraud in Public Construction
- Senate Bill 1478 An Act to further define fraud in public construction contracts (Donoghue)
- Senate Bill 1507 An Act relative to the definition of fraud in public construction bid laws (Moore)
- House Bill 2805 An Act relative to the definition of fraud in public construction bid laws (Ferrante)
ABC supports S 1478, which defines fraud in a manner consistent with the 2010 Massachusetts Supreme Court Case Fordyce v. Town of Hanover. This case considered whether inaccurate information contained in a contractor’s prequalification submittal constituted fraud. The MA Supreme Court ruled that “the Legislature intended the word (fraud) be interpreted with its ‘ordinary and approved usage’.” The MA SJC ruled that the common law definition of fraud is consistent with the objectives of the Commonwealth’s public bid laws. The cornerstone of the Hanover decision was that fraud is tied to whether an awarding authority relied on the fraud to its detriment. “In the absence of reliance by the committee (of the awarding authority) ….misrepresentation…does not constitute fraud,” the court ruled. S 1478 clarifies the bid laws so that fraud is defined in a manner consistent with the court’s ruling.
ABC opposes S 1507 and H 2805 as these bills seek to establish a new definition of fraud that is not consistent with the SJC Hanover decision. These bills seek to establish a definition of fraud that is significantly different from the common-law definition. Under this new definition, fraud is committed “regardless of whether the statement, act or omission is actually relied upon” by the awarding authority.
Residency and Responsible Employer Requirements
- House Bill 2792 An Act to promote responsible contracting on state construction projects (Collins)
- House Bill 3435 An Act to relative to public construction employment (Vega)
ABC opposes these bills. Both residency requirements and so-called “Responsible Employer” requirements have been found to be illegal. Most recently, the U.S. District Court found that residency requirements in Fall River and Quincy violated the U.S. Constitution’s Privileges and Immunities Clause. The MA Supreme Court issued an advisory opinion in 1984 against a requirement calling for 80 percent employment by MA residents. The MA SJC cited the U.S. Supreme Court’s Camden decision in finding that this requirement violated the Privileges and Immunities Clause. Under the same rationale, courts have also struck down residency requirements in Lowell and Worcester.
The same U.S. Court decisions in Fall River and Quincy that found against residency requirements also found illegal so-called “responsible employer” requirements that are contained in H 2792. Among the requirements found illegal was mandatory participation in state-approved apprentice training programs, which is what is proposed in this bill.
“Now as then, ERISA preempts mandatory apprenticeship program requirements,” wrote U.S. District Court Judge Rya W. Zobel in her decision invalidating Quincy’s apprentice training requirement. The Massachusetts Attorney General’s Office reviewed another similar apprenticeship requirement proposed in the town of Somerset and wrote: “Because the apprenticeship program in Section I.C of the Somerset by-law is substantially the same apprenticeship program language which was disapproved in the Fall River and Quincy cases, and because we find no other cases in the First Circuit which dictate a different result, the Fall River and Quincy cases suggest that Section I.C would be held similarly preempted by ERISA.”
ABC supports apprentice training and operates the Merit Apprenticeship Program. We believe the Commonwealth and the construction industry are better served by promoting and encouraging apprentice training rather than seeking to legislate mandates that are legally unsustainable