August 7, 2007

Washington, D.C.—In a landmark ruling on the National Labor Relations Act and how it applies to the construction industry, the National Labor Relations Board (NLRB) has held that a labor union representing construction craft workers and the owner of an upcoming project cannot lawfully agree to require the owner’s construction contractor to sign a project labor agreement.

“This is extremely good news for both open shop and union contractors,” said Stephen E. Sandherr, Chief Executive Officer of the Associated General Contractors of America (AGC). “The decision will reduce the top-down pressure on open shop contractors to change their labor policy, without regard to either their rights or their employees’ preferences. It will also protect the collective bargaining process, and the union contractors committed to that process, making it far more difficult for labor unions to bypass the companies actually employing their members, and to negotiate, instead, with project owners,” he added.

The case grew out of an agreement between the unions representing the construction craft workers in an area of New York and a private company that designs, owns and operates power cogeneration facilities. The unions and the owner had entered into an agreement providing that the owner would require its construction contractor to sign a project labor agreement. The NLRB found that the union “wanted a labor monopoly at a major construction site” and the owner’s primary “purpose was to remove the threat of union opposition to its efforts to secure regulatory approval of its cogeneration plans.”

AGC represents thousands of both open shop and union contractors, and was the only trade association to file a friend-of-the-court brief with the NLRB. AGC explained that “direct negotiations between construction unions and the employers of their members” are critical to the success of collective bargaining, and have enabled construction unions and such employers “to standardize work rules and other practices.” In its decision in Glen Falls Building and Construction Trades Council, 350 NLRB No. 42 (July 31, 2007), the NLRB emphasized that the New York unions did not have a collective bargaining relationship with the project owner, as the unions represented none of the owner’s employees, and the owner employed none of the union’s members.

AGC is the largest and oldest national construction trade association in the United States. AGC represents more than 32,000 firms, including 7,000 of America’s leading general contractors, and over 11,000 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters. Visit the AGC Web site at AGC members are "Building Your Quality of Life.”

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