Summit Natural Gas, a subsidiary of Colorado-based Summit Utilities, has decided to enter into a project labor agreement (PLA) for its Kennebec Natural Gas project, prompting outcry from Maine’s leading construction associations and strong disapproval from Republican Gov. Paul R. LePage.
“While I appreciate Summit’s commitment and investment in Maine to help reduce our cost of energy, I am extremely disappointed that they have chosen to implement a PLA on this project,” said LePage. “This action not only increases the cost of the project, but more importantly, it shuts out Maine’s construction workers and their families from good job opportunities,” he said.
Summit won approval from the state Public Utilities Commission to construct a natural gas pipeline through 17 central Maine communities, including Augusta, Fairfield, Gardiner, Madison, Richmond, Skowhegan, Waterville, and Winslow.
PLAs, also known as Community Workforce Agreements, are pre-hire collective bargaining agreements negotiated for specific construction projects. The terms of the agreement apply to all contractors and sub-contractors who win project bids. PLAs typically force winning bidders to hire unionized workers via union hiring halls or force non-union workers to sign labor agreements and pay union dues for the duration of the project.
According to the Governor’s Office, Summit’s PLA requires Maine contractors and subcontractors, regardless of their labor affiliation, to sign union agreements in order to work on a stretch of steel pipeline expected to cost $100 million.
The Associated Builders and Contractors of Maine and Associated General Contractors of Maine, who represent a combined 375 construction and construction related firms, have launched a public campaign against Summit’s proposed PLA.
“Summit Natural Gas has confirmed that they will utilize a project labor agreement on the project, which will require contractors to become signatory to union labor agreements in order to execute work,” the associations stated in a March 20 press release.
“[PLAs] create a cost environment that favors union contractors, restricting competition and driving up costs. In Maine, an estimated 1.4% of construction workers in the industry are union workers. The use of a PLA has the effect of discriminating against all open shop employees or 98.6% of Maine’s construction work force,” the release states.
AGC Maine and ABC Maine both believe that lifting the PLA would provide union and open-shop contractors with equal opportunities to bid on the contract.
“We are glad that Summit has chosen to do business here in Maine, but we are firm in our commitment to educate the public about the negative impact that their project labor agreement will have on Maine’s construction industry,” said Hope Perkins, President of ABC Maine.
“Fair competition is our goal, it is that simple,” said AGC Maine CEO Matthew Marks. “Regardless of union affiliation the award should be based on merit in the bid process. I believe Maine companies should be allowed to compete on all parts of the project and encourage Summit to reconsider their current approach,” he said.
Michael A. Duguay, director of business development for Summit Natural Gas of Maine, disagrees with LePage, Marks and Perkins regarding the nature of the agreement Summit’s laborers would have to sign in order to work on the steel section of the pipeline.
“It’s not a project labor agreement,” said Duguay. “It’s essentially a national pipe line agreement,” he said.
Duguay said the purpose of the agreement is to set standards for work conditions and best practices when laying pipe, adding that non-union workers are not barred from contracting or sub-contracting with Summit.
“We want the most qualified workers. They can be union or non-union,” he said. “We’re looking for what’s best for Maine and Maine communities.”
Duguay said he was unaware of any labor union involvement with the National Pipe Line Agreement.
The National Pipe Line Agreement is administered by the Pipe Line Contractors Association (PICA), a labor union established in 1948 to negotiate collective bargaining agreements.
According to PICA’s website, “The Association negotiates and administers the National Pipe Line Agreements (collective bargaining labor contracts), with the International Unions representing four crafts of employees involved in pipeline construction (Laborers International Union of North America, International Brotherhood of Teamsters, United Association of Plumbers and Pipefitters and the International Union of Operating Engineers).”
The current agreement, which is available at the Laborers’ International Union of North America (LiUNA) website, became effective on May 1, 2011 and lasts through January 31, 2014.
The introduction to the agreement contains the following: “WHEREAS, the parties hereto desire to stabilize employment in the Main Line Pipe Line Industry, agree upon wage rates, hours and conditions of employment; NOW, THEREFORE, the undersigned Employer and the Union, in consideration of the mutual promises and covenants herein contained agree as follows.”
The introduction to the agreement spells out the parties – Employer and Union – meaning those contractors and sub-contractors who sign on have for all intents and purposes joined a union.
The text of the agreement provides even more evidence that the National Pipe Line Agreement is an item of international unions’ collective bargaining – that is, a PLA by another name:
Section III, paragraph C of the agreement prevents employers from paying higher wages to better performing employees.
Section V, paragraph A of the agreement states:
“The Employer hereby recognizes and acknowledges that the Union is the exclusive representative of all employees in the classifications of work covered by this Agreement for the purpose of collective bargaining as provided by the Labor Management Relations Act of 1947.”
Section V, paragraph B of the agreement forces contractors and sub-contractors to pay union dues:
“All employees covered by this Agreement, as a condition of continued employment, shall, commencing on the 8th day following the beginning of such employment or the effective date of this Agreement, whichever is later, acquire and, for the duration of this Agreement, maintain membership in the Union.”
Section V, paragraph C of the agreement forces employers to deduct union dues from employees’ wages:
“Upon request of the Local Union or District Council having jurisdiction of the job, and upon presentation of the proper authorization form executed by the individual employee, the Employer agrees to deduct from the wages of such employee Union fees, dues or agency shop fees.”
Section VI, paragraph B dictates that contractors and sub-contractors may only hire 50 percent of all employees hired for a given project:
“The Employer shall have the right to hire directly fifty percent (50 %) of all employees hired depending upon the type of work, the location of the job and the existence of an exclusive referral procedure… If the local union is unable to provide qualified skilled pipe line employees then the Employer shall immediately notify the International Union.”
Maine Natural Gas (MNG), a subsidiary of New Gloucester-based Iberdrola USA, the parent company of Central Maine Power, has also recently won contracts to construct natural gas pipelines in and around Augusta. MNG, however, does not use PLAs such as the National Pipe Line Agreement.
MNG announced March 6 the beginning of construction on a 12” steel pipeline backbone of its natural gas distribution system in Augusta. According to the announcement, MNG has enlisted Enterprise Trenchless Technologies (ETTI) of Lisbon Falls, Cianbro of Pittsfield, and Shaw Brothers Construction of Gorham for the project. All three of the companies are non-union or “open-shop.”
Daniel J. Hucko, director of communications for Iberdrola USA, said MNG does not use PLAs on any of its projects.
“MNG doesn’t use PLAs because they don’t fit in with our philosophy,” said Hucko. “We wouldn’t want to exclude qualified people from getting a chance to bid,” he said. “The more bidders, the better the value.”
Summit’s Kennebec Valley natural gas project, which is set to begin this spring, is proposed to span from 88 miles from Augusta to Madison.
By S.E. Robinson
Maine Wire Reporter
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3 Comments
Nice reporting. It is a shame Summit Natural Gas is forcing Maine’s construction workers to join a union and requiring contractors to sign union collective bargaining agreements as a condition of working on and building this pipeline.
There are a lot of maine people including myself that joined the union for this project that now will have insurance witch could never of afforded be for this and was going to be penalized for it at tax time
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