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City Declares REO a Legal Risk

Wednesday, June 20, 2012

 

The crowd of union workers and supporters at Tuesday's meeting.

After facing heated words from local contractors and construction businesses, the city has declared the proposed responsible employer ordinance (REO) a legal risk. Despite this opinion from the city solicitor, city council voted 9-1 to advertise an amended version of the city’s REO at Tuesday’s meeting.

Given the solicitor’s concern about legal action against the city, the city manager urged parties to discuss other solutions between unions and non-unions, and redesign the ordinance. In addition to the decision to advertise the ordinance, council also voted to strike the Chapter 30 language.

In a letter drafted to city councilors, City Manager Michael O’Brien said, “As you know, a lawsuit by Merit Construction Alliance is eminent if this ordinance is approved (as detailed in their testimony). It is for this reason that I respectfully recommend that the City Council table the adoption of this proposal on a new REO pending further clarity on the legal issues concerning mandated apprenticeship programs.”

The proposed ordinance was submitted by the Committee of Economic Development to council at the end of May. The primary cause of concern and legal instability of the ordinance was its apprenticeship clause, which would mandate that all shops that previously did not

have an apprenticeship program would be forced to implement one, causing them to face higher costs and suffer a harder time competing with union shops.

Other issues with the drafted REO included residency requirements and health insurance.

At Tuesday’s meeting, hundreds of union workers and supporters attended the council meeting, spilling out into the hallway as local workforces testified in favor of the REO.

Members of Worcester Interfaith, a labor lawyer, and community organizers spoke to the ordinance’s benefit for the community and declared it to be an issue beyond union versus non-union.

Legal Risks

Last week, the issue brought heated words from many in attendance, and the item was sent to the City Solicitor, David Moore for a legal evaluation.

O’Brien proposed assembling representative from all sides of the issue to determine other options in maintaining a training component in the city’s REO “REO in a manner which serves the public interest, meets all legal requirements and is agreeable to all sides.”

Ronald Cogliano of Merit Construction Alliance, originally offered this solution at last week’s meeting, yet according to Jack Donahue of the New England Regional Council of Carpenters, his scheduled time to speak was Labor Day. Cogliano cited the recent legal action brought against the city of Fall River, MA for its REO that would reflect poorly on Worcester’s ordinance. 

“The predominant legal issue raised by the draft REO is the constitutionality of the apprenticeship training program requirement,” Moore said in his response to the City Manager. “As has been previously reported, the Federal District Court for the District of Massachusetts invalidated the apprenticeship training provision of the Fall River REO.”

Overall, the proposed REO did not prove to be sufficiently different than that in Fall River.

“With one exception, this places the city in the same position it was after the Fall River decision, a position that led to the suspension of the apprenticeship training provision of the REO,” Moore said. With the exception of the pending case of the REO in Quincy, MA, the Solicitor believes the odds would have been stacked against the city, had the ordinance passed. “The likelihood of a legal challenge is, in my opinion, almost a certainty.”

Last Week’s “Bullying”

Many councilors voiced their reaction to last week’s meeting, calling those who spoke bullies and put forth their opinions that their threats to sue were false.

“If we go to court over this, so be it,” said Councilor William Eddy. “We’ve been there before.”

Councilor Rick Rushton was the first to speak in favor of the REO and said that according to figures he has seen, it was impossible that those employers not already using an apprenticeship program, could not pay for it.

“They’re arguing over $300, and that’s foolish,” he said.

The Dissenting Opinion

Council’s 9-1 vote pitted the mayor and all but one of the present councilors against the one dissenting opinion of Councilor Konstantina Lukes, who remains worried about the ordinance’s legal footing. She spoke through boos and shouts from those in attendance, saying that despite the power in the room, “The real power lies behind the court desk.”

“When this ordinance comes before them, unless we deal with it first, informally, it will be seen as another Worcester frivolous case,” she said. “Both sides are going to lose, and the only real solution to this is sitting down and discussing the issue. I’m not going to vote to advertise this because I am afraid and will not support a case with no merit.”

 

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Comments:

Christopher Horton

The underlying issues here - for the people - are jobs and money. Who gets the jobs? How much do they pay? What are the standards for safety, conditions, benefits? What are the benefits for the community from them? Will they provide opportunities for young people to learn a trade? Will the work get done right the first time?

And where do the paychecks get spent?

While this law does not have a hire-local requirement - many other cities do, typically that 51% of the workers reside in the city - but the requirements of strict adherence to local standards and participation in an apprenticeship program make it unlikely that a contractor from - say - New Bedford, using workers who get bussed in daily from New Bedford, will be able to underbid local contractors.

This is important not just for the jobs, benefits for the workers and conditions, opportunities for our young folk. It's also about the "multiplier effect": keeping the money in circulation locally, which generates more local jobs - as many as one additional job created for each local person working on the site - as the money circulates around in Worcester.

Jobs - and maintaining local standards for pay, training and conditions - is a huge issue. The Governor is bragging about how the official Mass. "Unemployment Rate" is down to 6%. The reality is that it is much higher. Many categories of unemployed worker are excluded from this count, and the official rate is only going down because people are giving up looking. There's a lot of misery and desperation out here.

At a time like this, if the government steps out of the way, what we will get is a dog-eat-dog scramble for the available jobs, a downward spiral of wages and conditions, collapsing revenues and failures for local businesses. We can't let that happen.

The new REO ordinance represents the efforts of an alliance of local community and labor organizations to defend our local standards and economy and block that downward spiral.

Edward Saucier

According to the latest City Council meeting in WoMag - Christopher Source, a labor union lawyer from Boston, says "we wouldn't be here talking about this issue today if it wasn't for" the court decision that struck down the Fall River REO.

He says "the judge in the Fall River case got it really wrong" and talks about Employee Retirement Income Security (ERISA plans).
"Not all apprenticeship programs are ERISA plans," the Supreme Court ruled. "That's very important because that highlights this is not a union issue."

He says courts only look at if “the ordinance in some way tries to regulate the structure of benefits." In Worcester's case, he says, that's not happening so it wouldn't be prohibited.

"I'm very well aware of the threat of litigation in this case...but you must assess at some level the merits of the arguments here. In my view it's a virtual certainty that when the issue reaches the appellate level or another federal jurisdiction" Worcester would prevail. He says you can't govern under fear of litigation otherwise you "become paralyzed."

Personally, I think you can bet your bottom dollar that Utility Contractors Association of New England (UCANE) and the Merit Construction Alliance (MCA) are working hand in hand with The American Legislative Exchange Council (ALEC). ALEC is a real nasty lobby group, sponsored by some of America’s largest corporations, writes legislation that tends to benefit its donors and ships these template bills to state legislatures for compliant lawmakers to pass. Those in favor of REOs should look into the behind the scene presence of ALEC.

Christopher Pinto

From this point on, with the exceptions of Konnie Lukes, we should all refer to the City Councillors as Union Councillors since it is clear that it truly is the unions and not the residents and businesses of our city that they represent.

We truly have one City Councillor left, Konnie Lukes.

The rest of them are "Union Councillors" i.e. "Union Hacks".

Great leadership provided by Joe Putty on this one. NOT!




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