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Legal challenge to Branstad’s proposal to drop project labor agreement dismissed

A campaign promise by Gov. Terry Branstad to rescind an earlier mandate by former Gov. Chet Culver for use of labor agreements in projects involving state funds survived legal challenge Wednesday when a case brought by labor unions was dismissed in U.S. District Court.

In February 2010, then-Gov. Culver issued an executive order that required state-funded bidding to include a project labor agreement, also known as a PLA. One of Branstad’s first acts upon being sworn into office in January 2011 was to issue his own executive order to prohibit use of PLAs. The Branstad administration contends that use of such agreements, which provide certain perks to workers such as union wages and work hours, have “impacted the essence and the spirit of the competitive bidding process for state funded projects and [have] infringed upon Iowa’s Right to Work law” as well as put minority- and women-owned companies at a disadvantage.

The move was immediately applauded by ABC of Iowa, which represents non-union construction and other related firms statewide.

“We believe that PLAs discriminate against workers who choose not be members of a union,” said Greg Spenner, the organization’s president. “The opportunity to work on state-funded projects should be open to all taxpayers.”

According to court documents, Central Iowa Buildings and Construction Trades Council and the Cedar Rapids/Iowa City Building Trades Council, both AFL-CIO affiliated, brought the lawsuit against Branstad and key members of his administration in reference to two specific construction projects initially executed in months prior to Branstad’s order.

The Central Iowa workers were working on a Marshalltown-based PLA for the Iowa Veterans Home, which had additional phases of the project built into its initial contract. The Cedar Rapids/Iowa City workers were involved in an Coralville-based PLA for a New Iowa River Landing Satellite Medical Facility. When Branstad signed his executive order “all references to PLAs were deleted from bid specifications for the Veterans Home and Iowa River Landing projects.” The previous contracts which called for continued use of PLAs in the construction projects were essentially null and void.

… [The unions] assert in their Complaint that as a result of the Defendants removing the PLAs from the bid specifications for the Veterans Home and Iowa River Landing projects, workers have been and will continue to be deprived of the benefits of the PLAs. Workers employed on those projects and workers included on out-of-work lists who have been denied employment opportunities, have lost and will continue to lose wages and benefits. Further, workers will be denied the opportunity to negotiate and secure benefits under future PLAs or other agreements falling within the scope of the prohibitions of [the executive order]. …

The unions charged that Branstad’s executive order was preempted by the National Labor Relations Act, that their federal rights had been violated, that there was a breach of contract on the two specific projects and that Branstad had violated the state constitution by forming a legislative act. They sought both injunctive and declaratory relief as well as attorney fees.

Citing previous court cases on the NLRA, including a dissenting opinion from a 2002 Iowa Supreme Court case, Jarvey concluded “the State, as the proprietor of its construction projects, can make the decision not to pay union wages or operate under union conditions.”

If the function of the prohibition had been regulatory and not proprietary, as Jarvey surmised, it would been a violation of the federal law, he said.

“This is a business decision that does not come in conflict with the NLRA because it is not designed to have a broad social impact, rather, the stated purpose is to administer proprietary projects more efficiently,” he wrote.

Order Granting Motion to Dismiss

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