Last Sunday, the headline from the Tennessean read "Unions shrink but stay active." Although the article focused on the use of union labor on Nashville’s convention center project currently underway, it provided a glimpse of the bigger picture of what is happening with labor groups in the construction industry.
In Tennessee, the percentage of work force represented by unions has decreased from 10% to 6.6% over the past ten years. Union work on the Music City Center has shown signs of promise, as organized labor won a spot in three major subcontracts (electrical, steel and plumbing) estimated to be worth more than $100 million in work.
But what is the real lesson behind these figures and reports? I think two driving factors on use of union labor are locality and project type. Here is what I mean:
- A state’s labor laws dramatically affect union participation. While this may be a no-brainer, consider Tennessee’s right-to-work laws, which provide that workers do not have to be union members to hold a particular job. The law states: "It is unlawful for any person, firm, corporation or association of any kind to deny or attempt to deny employment to any person by reason of such person’s membership in, affiliation with, resignation from, or refusal to join or affiliate with any labor union or employee organization of any kind." Tenn. Code. 50-1-201. The right-to-work laws can be a huge incentive for business, since owners and developers won’t have to negotiate with union.
- The type of project can also dramatically affect use of union labor. For example, just last week the AGC of America helped persuade the U.S. Army Corp of Engineers to withdraw its project labor agreement ("PLA") requirements on a project at the Patrick Air Force Base in Florida. According to the letter sent by the AGC, government mandates for PLAs for the construction of publicly funded projects is not in the best interests of the selection process. A federal project may implement certain labor requirements, which ultimately may be determined by the contracting agency. At the local level, there are instances where unions attempt to invest in the project through their pension funds in an effort to secure a portion of the construction work.
In the end, organized labor on a construction project will depend largely on the type of project (state or federal; public or private) and the applicable right-to-work laws, as well as the business clout and influence the particular union may have.