Will the recent deal to salvage the $2.8 billion second leg of the Rail-to-Dulles project require non-union bidders to play footsy with the construction unions? The answer is far from clear.
By James A. Bacon
A deal struck between the McDonnell administration and the Metropolitan Washington Airports Authority (MWAA) will not require bidders on Phase 2 of the Rail-to-Dulles project to sign a Project Labor Agreement (PLA). Or maybe it will. It’s really not clear. The wording of the Memorandum of Agreement (MOA) is ambiguous. At least one McDonnell administration official insists that the rights of non-union workers and companies are upheld in the agreement but neither the MWAA nor the Attorney General’s office is talking.
The PLA issue is a sensitive one. Earlier this year, the estimated cost of Phase 2 of the METRO rail project had ballooned roughly $1 billion higher than the $2.8 billion in funding sources lined up to pay for it. A deal brokered earlier this month by U.S. Transportation Secretary Ray Lahood seemingly got the project back on track by extracting various commitments and concessions from the state, MWAA, Fairfax County and Loudoun County, the four funding partners. The deal referenced a side agreement between Virginia and the MWAA that details “principles and requirements” for a labor agreement.
In Phase 1 of the construction project, which extends the METRO past Tysons Corner, prime contractor Dulles Transit Partners entered into a voluntary PLA to hire workers through a union hiring hall, although its sub-contractors were not required to do so. MWAA has sought to make that agreement mandatory for anyone bidding on Phase 2. But non-union companies and many Fairfax and Loudoun elected officials objected, asserting that such an agreement would discourage non-union companies from submitting bids. The loss of competition, critics said, could result in bids $300 million or more higher than the official estimate.
It is precisely that outcome that the McDonnell administration sought to avoid, says Thelma Drake, director of the Department of Rail and Public Transportation. A sticking point in negotiating the broader deal was MWAA’s insistence that bidders on the prime contract be required to sign a PLA. “We worried that having the PLA up front would discourage some companies from bidding,” she explains. The Commonwealth Attorney’s office got involved in drafting the language to ensure that any PLA would be consistent with state Right to Work laws.
“The PLA is not mandatory,” Drake says. “You cannot require your prime to sign a PLA.”
Sounds clear enough. But what does the actual MOA say?
The agreement states that no prime contractor or subcontractor can require an employee to join a labor union. It also says that no prime or subcontractor can be “discriminated against” based upon its affiliation or non-affiliation with a labor union. But then the MOA says this:
No prime contractor working or seeking to work on Phase 2 shall be required, in order to secure or maintain a phase 2 prime contract, to become a party to any labor agreement other than the Phase 2 PLA.
To some observers, the wording "other than" seems to specifically exempt the Phase 2 PLA from the rule -- especially when considered in the context of what follows, a principle that states sub-contractors shall not be required to sign any labor union contract, "including" the Phase 2 PLA. The wording would seem to create an arrangement nearly identical to the Phase 1 PLA, which binds Dulles Transit Partners to a union workforce but exempts subcontractors.
“There are a lot of questions out there,” says Angie Gutenson, vice president of the Virginia chapter of the Associated Builders and Contractors, which represents the interests of open-shop contractors in the state. The MOA states that Virginia’s Right to Work law will be enforced and that non-union companies will not be “discriminated against.” But what does “discriminate against” mean in this context? “We’re not lawyers, so we don’t know.”
Clearly, open-shop companies are not required to sign a contract with a union. But do the principles articulated in the agreement preclude the PLA from requiring the prime contractor to contribute to union pension and health-care funds on behalf of its workers, as required in the Heavy and Highway Construction Agreement that forms the basis of the Phase 1 PLA, even if they are non-union? Can a PLA require the prime contractor to hire workers from union hiring halls as long as workers aren’t required to join a union?
Lacking answers to specifics like those, it is impossible to know how to react to the agreement, says Gutenson. Unfortunately, the specifics may not be made public until the PLA is published as part of the Request for Proposal. By then, it could be too late for non-union companies to protect their interests. Will the McDonnell administration insist upon reviewing the PLA before the project goes out to bids? Or will it trust MWAA to comply with the principles laid out in the MOU? What if there’s a disagreement over the interpretation of how to apply the MOA principles to the PLA? Who makes the final decision?
Seeking answers, I contacted the MWAA.
Kimberley Gibbs, a spokesperson for the MWAA, referred me to a copy of the two MOAs, the main one brokered by Secretary Lahood as well as the companion PLA agreement. “I believe that the attached documents and link will answer your questions about the PLA agreements.”
Not really.
Next, I asked the Attorney General’s office to respond. Here’s what Brian Gottstein, director of communications for Ken Cuccinelli, had to say:
We cannot get into a lot of details because of attorney-client privilege and ongoing negotiations. But I can tell you that the Memorandum of Agreement … memorializes the commitment made by MWAA to the commonwealth that any PLA used for Phase 2 of the project must comply with Virginia’s Right to Work Law, which means workers cannot be compelled to join unions to work on the project.
Given that MWAA is an independent entity created by interstate compact, the commonwealth has very little control over its activities. But the commonwealth can insist that applicable Virginia laws be followed, and that is what we are doing through the MOA.
Reading between the lines of Gottstein’s statement: The MOA protects the rights of Virginia workers under the Right to Work Law but the McDonnell administration has limited purview to dictate terms of the PLA on matters not expressly directly covered by the Right to Work Law.
Here’s my sense of what’s going on. The McDonnell administration is under tremendous political pressure to keep Phase 2 of Rail to Dulles on the tracks. The agreement brokered by Lahood is a fragile one. Among the potential sticking points is the fact that the General Assembly must approve the commonwealth’s extra, $150 million contribution to the project. That means the administration must win a majority of the House of Delegates, two-thirds of whom are Republicans and, one can assume, not terribly receptive to doing Big Labor any favors. Any deal perceived to favor labor unions at the expense of taxpayers will encounter significant resistance. If foes deny the $150 in extra state funds, they effectively scuttle the entire $2.8 billion Phase 2 project.
Complicating matters, Attorney General Ken Cuccinelli has gone on the record as being opposed to the Dulles Metrorail project. Back in June, the AG told WMAL Radio, “I hope they don’t do Phase Two.” He described the project as an “economic boondoggle” and said, “The cost-benefit just is not there.” He said he hoped that voters elected a new board of supervisors in Loudoun County that was “committed to pulling out of Phase Two to kill it.” He also said he was monitoring MWAA’s efforts to require union labor and was prepared to file suit if a PLA were put into place contrary to Virginia’s Right to Work laws.
I conjecture that Cuccinelli swallowed his reservations about the merits of Rail-to-Dulles and decided to be a team player, telling his legal staff to help salvage the project in a manner that upheld the Right to Work Law. However, there may be legal limits to how far the AG’s office can go in dictating the terms and conditions of a PLA in order to protect non-union interests. I suspect that Cuccinelli’s attorneys, who wordsmithed the language of the labor MOA, papered over the tougher questions in order to avoid a debilitating controversy in the General Assembly session only two months away. If the wording is crafted carefully enough to persuade the director of the Department of Rail and Public Transportation that there's no problem, the deal may skate through the General Assembly, too.=============
This article was made possible by a sponsorship of the Piedmont Environmental Council.
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