Rocket Motor Corporation (RMC) entered into a project labor agreement with 17 local building trades

Rocket Motor Corporation (RMC) entered into a project labor agreement with 17 local building trades unions concerning a building remodeling project at one of the companys manufacturing plants. As part of the project labor agreement, the unions agreed not to engage in any strikes, slowdowns, or other work stoppages and not to honor the picket lines established by any other labor organization at the job site. RMC agreed as part of the project labor agreement to hire contractors and subcontractors who would employ individuals to perform construction work from each specified type of trade
Rocket Motor Corporation (RMC) entered into a project labor agreement with 17 local building trades unions concerning a building remodeling project at one of the companys manufacturing plants. As part of the project labor agreement, the unions agreed not to engage in any strikes, slowdowns, or other work stoppages and not to honor the picket lines established by any other labor organization at the job site. RMC agreed as part of the project labor agreement to hire contractors and subcontractors who would employ individuals to perform construction work from each specified type of trade represented by the 17 unions at terms and conditions of employment equal to the terms specified in any applicable union contract covering the type of work to be performed. The project labor agreement called for final and binding arbitration to resolve any disputes arising from the interpretation or application of the terms of the project labor agreement. Bolton Engineering (BE) was one contractor hired by Rocket Motor Corporation to help remodel the companys paint facilities at the work site. As part of the contract entered into between RMC and BE, a pledge to adhere to the project labor agreement previously signed by RMC and the 17 unions was included. BE employed only a few supervisory employees of its own at the work site and relied upon unionized subcontractors to complete most of the assigned job site tasks. However, a significant portion of the metal fabrication work was subcontracted to two nonunion subcontractors whose employees performed the work offsite. All of the metal fabricated parts built offsite were eventually to be installed on the job site by union labor. Local 82 of the Steel Fabricators Union (SFU) learned that BE was using nonunion labor at offsite facilities to perform metal fabrication work that could have been performed onsite by union members represented by the SFU. The prevailing wage for a steel fabricator under current area labor agreements covering SFU members was $20.73 per hour whereas the offsite nonunion workers were paid $9.00 per hour to perform the steel fabrication work. Local 82 leaders believed that BE was in violation of the project labor agreement by subcontracting steel fabrication work to nonunion subcontractors who were paying their employees substantially less than the prevailing wage rate called for under Local 82s current contract. Failing to resolve the issue voluntarily with BE, Local 82, SFU filed a grievance, which eventually went to final and binding arbitration. The union sought damages from BE in the amount of $1.6 million, the amount of the difference between the wages paid nonunion employees who performed the steel fabrication work offsite and what Local 82 members would have received had the work been performed by them on the work site. Questions 1. Is BE bound by the terms of the project labor agreement, which it did not directly sign, including the duty to submit this labor dispute to final and binding arbitration for resolution? 2. Was the project labor agreement only meant to apply to work performed on the job site as BE contends, or could the terms of the project labor agreement also be applied to offsite work as well as the Union contends? 3. Is it legitimate for a labor organization to negotiate a work preservation clause which seeks to encourage contractors to perform work on the job site using union labor by imposing an economic incentive not to outsource the work elsewhere to lower paid employees? 4. What, if any, legitimate business interest of an employer is served by agreeing to a so-called work preservation agreement with one or more unions?