December 17, 2017

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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.

© 2017, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

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About this Author

Jonathan M. Mraunac, Ogletree Deakins, Construction Claim processing Attorney
Of Counsel

Jonathan Mraunac represents general contractors, subcontractors, suppliers, and other participants in the construction industry. As a member of Ogletree's construction practice group, Jonathan advises clients relative to all aspects of the construction process including the prosecution and defense of claims in federal and state court, arbitration, and mediation, the perfection and prosecution of mechanics lien claims, and the formation and negotiation of contract documents.

Recently, Jonathan obtained summary judgment for a subcontractor client...

312-558-3022
Randolph Ruff, Construction Attorney, Ogletree Deakins Law Firm
Shareholder

Mr. Ruff has been representing general contractors, subcontractors, suppliers and other participants in the construction industry since 1986. As the chair of Ogletree’s construction practice group, that U.S. News and World Report has ranked as a Tier-1 practice group, Mr. Ruff prosecutes and defends claims arising out of public and private construction projects in federal and state court litigation, arbitration and mediation. Mr. Ruff handles claims involving construction and material defects, improper or non-conforming work, extra work, changed conditions, warranty, delay, disruption acceleration and contract interpretation. In addition, he assists contractors in negotiating construction contracts with owners, design builders and architects as well as preparing subcontract programs on a client-by-client or job-by-job basis. Mr. Ruff is familiar with traditional delivery systems as well as design-build, fast track, and collaborative systems.

312-558-1228 r
Richard L. Samson, OgletreeDeakins, attorney
Shareholder

Mr. Samson has represented management in all aspects of labor and employment law for over 27 years with a particular emphasis on traditional labor law. He has also litigated cases before federal and state courts as well as state and local agencies in employment discrimination and wrongful discharge actions. He routinely advises clients on a host of employment-related issues including employer investigations, claims of harassment, employment policies and social media.

In the traditional labor arena, his experience covers the gamut of issues...

312-558-1229