Construction One-Minute Read: Labor Harmony on a Mixed-Trade Project

Construction projects that have a mixture of union and non-union trades are becoming more prevalent. A contractor undertaking a mixed-trade project must understand that harmonizing these two groups may present challenging issues. (This article does not address area-wide strikes, only strikes specific to a single, mixed-trade project.)

As with many problems, those involving labor harmony often begin with the owner-contractor agreement. Owners are increasingly insisting on labor-harmony provisions that obligate the contractor to staff the job despite the occurrence of picketing activity and prohibit the contractor from obtaining extra time or money for delay or disruption occurring as a result of picketing activity. Therefore, contractors must understand their risks and know how to manage a mixed-trade project in order to minimize the risk of delay and disruption.

If the owner is responsible for supplying the nonunion labor, the contractor may want to consider negotiating the prime contract for entitlement to time and cost increases in the event of a picketing delay or disruption. However, if the contractor hires the nonunion labor, the owner will likely expect the contractor to bear the risk of time and cost impacts due to delay or disruption as a result of picketing activity.

When a contractor is faced with a labor-harmony obligation like the one described above, there is risk that picketing will deter subcontractor attendance. Before agreeing to ensure labor harmony, the contractors should understand the jobsite’s layout and access. The most common solution to minimize interference from picketing is a dual-gate system—one gate for the exclusive use of the target of union picketing (which could be more than one contractor), otherwise known as the “primary” gate, and the other exclusively for all other contractors’ access, known as the “neutral” gate. Ideally, the two gates should have considerable distance between them, as much as the site permits. Because union picketing activity by law may only occur at the gate reserved for the contractors with which the picketing union has a dispute, the distance between the gates should reduce the likelihood that union trades are exposed to picketing as they enter and exit the site.

If an employee, visitor, or supplier of the picketed contractor uses the neutral gate, the law permits picketing to thereafter occur at the neutral gate also.  Contractors can reduce the likelihood of this occurrence by requiring its subcontractors, via the subcontract agreements, to adhere to (1) any dual-gate policy implemented on the job and (2) the same labor-harmony obligations the contractor has toward the owner.

If a dual-gate solution is not feasible, consider having nonunion trades work off-hours and/or on weekends. There are times where even a properly established dual-gate system does not prevent work stoppages from occurring. Evaluation of the contractor’s contractual obligations becomes even more important in such circumstances.

The attorneys in Ogletree Deakins’ Construction Law Industry Group will continue to cover developments, news, and legislation pertinent to the construction industry.