By Daniel Geiger
The Building Trades Employers Association, a group that represents construction contractors in the city, announced Tuesday afternoon that it will not renew a 108-year-old agreement that has effectively bound its members to employ union labor and abide by union work rules on construction jobs.
The New York Plan, as the agreement is known, has been in place since the early 1900s, but contractors have begun to complain that the plan’s rules are costly and inefficient and have become untenable amid an economic downturn that has decreased the amount of work in the construction industry.
“We can’t build in a 21st century market with 19th century rules,” said Lou Coletti, president of the BTEA. “We remain committed to building with 100% union trades, but we have to have flexibility to be competitive in order to remain viable, and we need to have work rules that are productive. The city needs more affordable construction work to build the commercial and residential space that it needs.”
The decision appeared to be at the very least a shot across the bow of organized labor as contractors and union representatives for several building trades have entered negotiations this month to renew their labor agreements. Several unions representing thousands of union workers in trades such as painting, carpentry, glass installation, steamfitting, and crane operation, have contracts that expire at the end of June.
Last month, the painter’s union came to a new agreement that cut overtime costs, included only modest wage and benefit increases, and installed more flexible work rules that contractors say will allow them to operate more efficiently and charge less for jobs. Though the agreement was widely hailed as a model agreement for re-configuring the economics of an industry that has begun to steadily lose market share to cheaper non-union competitors, it isn’t clear whether it will serve as a template for the other negotiations.
Several sources in the construction industry say that certain unions such as the operating engineers have opposed the kinds of concessions included in the deal with the painters. Much of the disagreement has been over the work rule changes, not wages or benefits, which contractors haven’t sought as vigorously to cut. The work rule changes have included efforts to standardize holidays among the different trades and clock employees in when they actually begin work, not just when they report to a construction site.
Contractors have also asked the unions to be available to work flexible shifts that may start earlier or later in the day or even on weekends, without incurring costly overtime charges. Contractors involved in the painters agreement said that work rule modifications in their agreement yielded significant cost savings, up to 10-20% on the price of a job.
“By withdrawing from the New York Plan, it could allow contractors more leeway to choose who they hire,” said Steven Spinola, president of the Real Estate Board of New York, a trade organization that represents landlords in the city and has supported efforts to reduce the cost of construction in the city. “It leaves the door open that if a union trade is unreasonable, if the costs are out of line, a contractor can hire another union or even non-union workers. This will give control of construction jobs back to the contractors so that they can be more responsive to developers and building owners, who need to cut costs with today’s economics.”
Coletti said that he wasn’t sure what the impact of withdrawing from the New York Plan would be but that many contractors still wanted to employ union labor because it is still widely held that union workers do better quality work. Working outside of the agreement could allow contractors better bargaining power to receive concessions from union labor or allow builders to hire other unions outside of the building trades to work on jobs. There is even talk in the industry of a day when contractors can hire both union and non-union workers for projects, a mix that organized labor has vehemently opposed in the past.