NLRB Validates Job Targeting Program Involving State-Funded Projects

The National Labor Relations Board (NLRB) has reaffirmed its position that union job targeting programs are protected under the National Labor Relations Act (NLRA) and has clarified that this protection extends even to programs funded in part by voluntary deductions from the wages of workers employed on state-funded public works projects.  The case – which has a 20-year history – involves a job targeting program maintained by United Association Local 189 funded by a two-percent Market Recovery Assessment of the gross hourly wages of its members.  The union used the fund to subsidize wages paid by signatory contractors on selected projects, enabling the contractors to bid those jobs based on wage rates lower than the union scale but to still pay their employees the union rate.  J.A. Guy, Inc. (Guy), a signatory contractor, was the successful bidder on two targeted jobs for Pickaway County, Ohio.  J.A. Croson Co. (Croson) was an unsuccessful competitor on both jobs.  Croson filed a lawsuit claiming that Guy’s participation in the job targeting program was unlawful because assessments were taken from employee wages earned on state projects in violation of Ohio’s prevailing wage law.  The Ohio Supreme Court ultimately dismissed Croson’s lawsuit, finding that it was preempted by the NLRA.  Guy and Local 189 each filed charges against Croson with the NLRB for maintaining the lawsuit. Past Board decisions have established that job targeting programs like the present one are protected by Section 7 of the NLRA, whether the targeted jobs are public or private.  Questions arise, however, when the source of the funds are wages earned from public jobs, as they may effectively constitute a reduction below the prevailing wage or a “kick-back.”  In a 2000 decision later upheld by the U.S. Court of Appeals for the Ninth Circuit, the Board held that a union commits an unfair labor practice by collecting job targeting assessments from wages earned on Davis-Bacon projects absent the workers’ individualized consent.  The Board distinguished that case from the present one, because, not only were the Pickaway County jobs not covered by Davis-Bacon, there was no evidence that any assessments were taken from earnings on Davis-Bacon jobs.  The Board found that “uniform precedent holding job targeting programs protected, except for projects covered by the Davis-Bacon Act, compels our conclusion that the program at issue here was clearly protected under the NLRA.” After agreeing with the Ohio court that Croson’s lawsuit was preempted by the NLRA, the Board further found that the bringing of the lawsuit violated Section 8(a)(1) of the NLRA because it interfered with protected activity (i.e., operation of the job targeting program).  In determining the remedy, the Board considered whether to follow its typical approach and require Croson to reimburse the opposing party’s legal fees and expenses.  Under the circumstances, it chose not to do so and merely ordered Croson to cease and desist in prosecuting its already-completed lawsuit and to post a remedial notice. J.A. Croson Company, 359 NLRB No. 2 (9/28/12).