City Council to hear union preference 'fixer bill' next Wednesday, June 3

News Release from Jas. W. Glover, Ltd., May 29, 2020

A Bill to fix a flawed City Ordinance, coming up for a full Council vote next week, faces widespread opposition from members of the construction industry.

Bill 40 Relating to Community Workforce Agreements (CWA), introduced by Councilmember Joey Manahan, is up for third reading on Wednesday, June 3, 2020.  The Bill seeks to amend Ordinance 19-24 Relating to CWA allowing the City administration to negotiate public works construction projects with construction trade unions and requiring all contractors and subcontractors to be signatory to these CWAs.  The Ordinance passed into law last fall amidst concerns that it could be discriminatory and jeopardize the City’s ability to receive Federal funding for public works.  It was to go into effect on May 30, 2020.

A large majority of the construction industry, including general contractors, subcontractors, vendors and professional organizations came out strongly against CWA legislation when it was heard by the Council in October.  They are again rallying against Bill 40 and recommend the Council repeal Ordinance 19-24 altogether. 

Community Workforce Agreements, previously known as a Project Labor Agreements, require any contractor and all subcontractors, as a condition of receiving a City public work project over $2 million, to sign the CWA.  This will require the contractors to abide with whatever was negotiated with the building trades, including but not limited to, using only unionized labor, all employees paying dues whether or not they are members of a union, and employees paying fringe amounts into the union benefit plans.  This forces open shop (nonunion) contractors to either have to lay off their existing employees and go to the union hall for hires, or keep their employees and then pay dues and additional fringe amounts into union benefit plans for which their employees will never receive. 

To open shop contractors, which represent roughly two thirds of Hawaii’s construction industry, the ordinance is a union preference law and threatens their employees who choose not to work for unions.  For unionized contractors, the measure is detrimental because it requires the City Administration to negotiate work conditions directly with the building trades thus bypassing current collective bargaining agreements signatory contractors have established with their unions. 

However, the largest group of individuals that will be affected by Bill 40 are all taxpayers of the City & County of Honolulu.  Bill 40 will decrease the amount of contractors that normally bid on public works projects and will thus lessen competition.  Lessening competition will increase the bid prices and contract amounts on these public works projects.  The taxpayers of the City & County of Honolulu will be paying for those increased costs.  This is not necessary or prudent as the current laws insure that the taxpayers receive the best project for the taxes and monies that they pay into the City & County of Honolulu.    

“At a time when the City should be looking for ways to reduce costs and stimulate business opportunities for all, this does just the opposite.  It’s anti-business.  Even small ‘mom and pop’ shops such as owner-operator subcontractors or trucking companies will be negatively affected”, said John Romanowski, Vice President of Jas. W. Glover, Ltd.

Romanowski said that any project awarded under a CWA mandate is sure to be challenged in court and this too will increase costs to the City and delay project start dates even further.

“With such tremendous opposition, we were surprised when Bill 37 (which later became Ordinance 19-24) was passed by the Council last fall,” said Romanowski. 

Romanowski said more than 170 pieces of testimony were received against Bill 37, with only 24 testimonies from labor unions in support. 

Despite industry opposition, unions and union organizations claim the Ordinance ensures that local people get City jobs and that contractors follow wage and hour laws. 

There are already extensive laws (HRS 104) on the books and enforcement agencies to make sure that contractors are compliant with those laws.  Since the issuance of 2010 Comptrollers Memorandum, contractors have signed statements that at least 80% of their workforce is comprised of Hawaii State residents.

“It has never been a problem for us.  We have many employees that are third and fourth generation working in our company”, said Romanowski.  He said Glover was established in 1935 and has the lowest contractor number in the state. 

“How do we tell our employees that they’re now not local enough to work on City projects?” said Romanowski.  “Does having them work on a CWA project suddenly make them more local?”

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Background:

May 4, 2020: Bill 40: City Council to Save Construction Industry from Crooked Union PLA Requirement?

Oct, 2019: PLA measure is pilau

July 2019: Former Official of Crooked Painters Union Trying to Convince Council to Require Union Contractors on City Projects

Reality: TheTruthAboutPLAs.com

2013: Feds Investigate Nathaniel Kinney for Crooked Painters Union Business:

2012: ABC Hawaii Chapter Blasts Abercrombie’s PLA Directive