Necessity questioned of law sparked by controversial union contract provision

Arizona Capitol Times   

Pierce agreed in using local labor and thought the condition of the contract was an effective way of enforcing that requirement.

The new law, which was one of more than 300 to go into effect July 20, prohibits any public agency from structuring a contract so that it requires the contractor to negotiate with a union organization.

The bill, which passed along party lines, was sponsored by Sen. Don Shooter, R-Yuma, and was supported by organizations like the Arizona Chapter of Associated General Contractors, who argue that union organizations have tried to sneak such provisions into contracts in the past. But Democrats and union consultants say the law is simply another way of demonizing unions in order to score political points.

The bill, SB1043, was a response to controversy that erupted last year over the Arizona Corporation Commission's Line Siting Committee when it included a provision in Hualapai Valley Solar's February Certificate of Environmental Compatibility that required the contractor to go through the Arizona Building Trades Council in order to find workers.

Condition 28, as it was labeled in the contract, ignited the outrage of AGC president David Martin, who called it a "Trojan horse" that gave the ABTC and its unionized members preference when it comes to bidding contracts.

But union consultant Israel Torres, who recommended the language to the committee, dismissed the AGC's concerns, arguing that Condition 28 was merely an excuse for the AGC to promote an anti-union agenda.

The goal, Torres said, was to promote the use of local labor for Arizona projects.

Because the construction industry has been so hard-hit by the recession, Torres argued that it would be easier for a contractor to find laborers in other states willing to travel for work, and it would be in the contracting agency's best  interest to pull in whomever would work for the least money.

Often, the Line Siting Committee will ask the company to whom the contract is awarded whether they intend to use local workers, but there is typically no requirement for them to do so and the panel only has the contractor's word to go by, Torres said. Since the ABTC works with out-of-work contractors, it seemed logical to require a contractor to go through them to find laborers - regardless of whether they belong to a union - who live in Arizona.

"We have a lot of unemployed construction workers in this state," Torres said. "We should use local workers, particularly if it's in Gila Bend or other areas with particularly high unemployment.

Martin didn't buy that reasoning.

"By virtue of a (contractor) having to go through a specific organization, it gives that organization an extraordinary amount of leverage over the developer," he said. "Thus, what the Building Trade Council did was they basically tried to strong arm developers to enter into these model construction agreements."

But Corporation Commission Chairman Gary Pierce, a Republican, said he never read the condition the same way the AGC did. Throughout the controversy, he maintained that he shared Torres' goal of supporting local labor, and argued that neither the commission nor the Line Siting Committee would ever allow the unions to abuse such a provision.

"I've been kind of caught in the middle of all this," Pierce said. "I'm not sure a commission led by me as chairman would not be judicious with that condition, but they could say, 'You're not always going to be there.'"

Condition 28 reads: "Within ninety (90) days of the Commission's decision granting this Certificate, the Applicant shall make good faith efforts to commence discussions with the Arizona Building Trades Council on a model construction agreement to encourage the utilization of qualified local or Arizona union or non-union construction workers for the construction of the Project."

Though the wording seemed innocuous, and Torres pointed repeatedly to the "union or non-union" wording as proof that there was no required union preference, Martin maintained that requiring a contractor to go through the ABTC gave the organization the ability to direct the developer toward union workers.

To settle the dispute once and for all, Martin said he approached Shooter, who said he decided it was something he could get behind from a pro-free market standpoint.

"I think it's important that people are allowed to make any deal they want and not belong to a union to get work," Shooter said.

The bill passed both legislative chambers along party lines, with Republicans supporting the bill and Democrats opposing it.

House Minority Leader Chad Campbell said he and other Democrats objected to what they saw as the underlying intent of the bill: to continue to promote unions as a scapegoat for the state's economic troubles.

"If you look at Arizona, it's not like it's some state that's controlled by the unions, or that they're holding us hostage," he said. "And if anything, now, we really shouldn't be doing anything to upset any type of contractual process."

His comments echo Torres', who has repeatedly dismissed Martin's protests as "boogeyman hysteria." Like Campbell, Torres argues that the new law may work against the free-market ideals Shooter and Martin are promoting.

"Any time you try to regulate a market like that by saying, 'You can't do this,' I don't think it's a good thing," Torres said. "If we want the free market to prevail and they want to engage with a (project labor agreement), let them."

But Shooter maintains that he holds no grudge against unions, and encourages workers or companies to unionize if they think it will help them.

His objection, he said, is to requirements that he considers unfair.

"This bill isn't anti-union," he said. "It's pro-freedom."

Now that the law has gone into effect, however, all parties acknowledge that it won't make any earth-shattering changes to the status quo.

Like Condition 28, any future attempts at gaining influence by the unions will probably be done in such a way as to fly under the radar, at least initially, Shooter said.

"That's the only way they can do it, I'm sad to say," he said. "A lot of these deals are that way because they won't stand in the sunshine."

But Martin points out that while he expects the unions to use similar tactics in the future, the new law is a step forward at protecting non-unionized laborers.

"It'll make sure that governmental entities that are beholden to unions cannot exclude, in the case of construction, 93 percent of the market," he said.

But Campbell and Torres say it's all posturing and won't have any practical effect on the state.

"If you look to the results, there's not any, because it isn't happening," Torres said. "There's no impact on business in Arizona, but it feels good to a certain political ideology or base to say, 'We stopped those unions.'"

Campbell agrees, saying that there won't be any effect on the unions in this state, including any negative consequences.

Although he said that he still isn't convinced the law is necessary, Pierce said that he understands the legislators had concerns about the condition and wanted to make sure the Corporation Commission or any of its committees were not overstepping their authority.

However, he added that if he ever thinks that the commission needs to be better able to enforce any local labor requirement, with or without union involvement, he might approach the Legislature himself about finding a way to do so.

"We ask (contractors) those questions, about using Arizona workers, and if they agree to it, we expect them to fulfill the promises they've made," he said. "And if that's a problem, we'll go to the (Legislature) ourselves to say, 'You know, we need some help to put some teeth in it.'"