Labor Focus: Helping Contractors Avoid Pitfalls On Public Construction Projects

Wednesday, September 1, 2004 - 01:00

Editor: How has your labor and employment practice been affected by New
Jersey's ambitious school construction program?

McEwan: Several years ago, New Jersey set aside
an unprecedented $12 billion for a public school construction program under the
Educational Facilities Construction and Financing Act, P.L. 2000, c. 72
(N.J.S.A. 18A:7G-1 et seq.). Most of the money is targeted for needier urban
schools to meet the mandates of Raymond Abbott v. Fred G. Burke, 153 N.J.
480 (1998). The remainder is for all other school districts as well as county
vocational schools.

We represent numerous construction contractors who are either working on
these projects or who would like to work on them. Issues that commonly arise
include union organizing, picketing, arbitration under collective bargaining
agreements or project labor agreements, union fund audits, and general labor
contract administration disputes. We have also seen a sharp increase in the
number of actions before the State's Department of Labor (DOL), which is charged
with enforcing prevailing wage laws.

Editor: Why are contractors with no union affiliation concerned about
their ability to compete for this work?

McEwan: Immediately following his election, Governor McGreevey
signed Executive Order 1, which called for the use of Project Labor Agreements
on public construction projects. Project Labor Agreements essentially require
union labor to be used. Contractors who operate non-union recognized the
potential of the Governor's order to limit their ability to compete in the
multibillion dollar public school construction program. Although a more limited
version of the Governor's Executive Order is in effect today, the use of Project
Labor Agreements on larger school construction projects remains a very real
issue for non-union contractors.

In addition, watchdog groups funded by the State's construction trades unions
have diligently monitored job sites in an attempt to unearth violations of the
law, real or perceived, by contractors. These groups then pass "leads"
concerning alleged violations on to government agencies like the DOL and the
State's Occupational Safety and Health Act office (OSHA). Not surprisingly,
given their base of funding, the efforts of these watchdogs are directed at
contractors who operate non-union. As a result, most of the agency actions also
involve non-union contractors.

The last thing a contractor needs while trying to complete a job is to have
to defend itself before the DOL or OSHA. It takes time and money, regardless of
whether there is any actual violation. As a result of this situation, some
non-union contractors feel like they begin the process under a microscope and
never shake the intense scrutiny of organized labor and agencies which, at
times, appear all too eager to enforce the laws in the strictest manner

Editor: Have you heard concerns expressed about selective prosecution by
government agencies against non-union contractors?

McEwan: Right or wrong, some contractors I meet who are working
on public construction projects are suspicious of what they perceive as a high
degree of cooperation between organized labor and agencies like the DOL.
Governor McGreevey's outspoken support of organized labor, it appears, feeds
into that suspicion. In the past few years, New Jersey has
debarred more contractors than any other state. Debarment means a contractor
can't bid on public construction projects for a period of time. Many of the
debarred contractors are non-union, and some are first time offenders. It's
obviously necessary to ensure that employers are complying with the law, but
some non-union contractors sense they're facing unequal enforcement.

Editor: How do you advise contractors engaged in public construction
projects with regard to the requirements of New Jersey wage and hour laws?

McEwan: Any contractor who wants to be a long-term player in
public construction in New Jersey has to understand what their obligations are
under prevailing wage laws. As soon as I commence work for a contractor
performing public work, whether the contractor employs union labor or not, I
explain in plain English what the law requires, and I set out practical steps
they need to take to ensure compliance.

Editor: How are you getting the word out that construction contractors
need to avoid violations of the technical, as well as the substantive,
requirements of the wage and hour laws?

McEwan: I took the checklist I use in my initial meetings with
clients and, working with our Firm's Marketing Department, we turned it into a
plain-language do's and don'ts article. Then, we obtained a list of all
registered public works contractors from a government web site and mailed them
the article along with an introductory cover letter. At the same time, we told
the story about union watchdogs to our Firm's public relations consultant, Alex
Michelini, who developed a thorough investigative feature article that was
picked up by several construction trades publications.

The response to these efforts has been overwhelming, which really confirmed
the Firm's belief that there was a legal need in the marketplace that was not
being serviced. Since then, several state and national contractor groups have
invited me to speak to their members about these and related legal issues.

Editor: How can a construction contractor avoid problems when the DOL or
OSHA investigates a job site?

McEwan: The easiest answer is to make sure you are following
the law! Contractors should also know, in advance of performing work, what is
required by way of record keeping and reporting. Both the DOL and OSHA have the
right to visit a jobsite, examine records, and evaluate compliance. There's
nothing to be gained by trying to stonewall a field agent from the agency. Most
will try to work with your schedule, but if they get no satisfaction, the agency
will simply subpoena the information. At that point, you are starting off behind
the eight ball.

If a violation is found, there are appeals processes that a contractor can
pursue. At this point, if legal counsel has not yet become involved, he/she
should get involved. It is not in a contractor's interest to simply
dismiss the agency's finding as wrong, and then ignore it. It won't just go
away. This is an area where the longer and deeper a contractor gets into a case,
the less likely it is that it's going to be able to get out of it in a manner
that's in any way satisfactory.

If, in a DOL case, debarment is sought, the contractor could be precluded
from bidding on public construction projects for three years. In many cases,
that is enough to put the contractor out of business, particularly if public
works comprise a sizable piece of the contractor's business.

The DOL's cases are tried before the state's Office of Administrative Law.
Although these cases are bench trials, they can at times resemble a Superior
Court action. When your business is at stake, you have to go the whole nine
yards to protect it, which can be very costly and time-consuming. This is a
clear case of an ounce of prevention being worth a pound of cure.

Finally, non-union contractors need to get over the fact that unions are
applying pressure through watchdog groups. What the union watchdog groups are
doing may seem unfair, but it's lawful. Similarly, if a government agency is
handling investigations and enforcing the law evenhandedly, then no one should
have a complaint.

Editor: As well as enjoying a challenging and rewarding
labor law practice, I understand that you are active in charitable and civic
affairs. Please tell our readers about your community service.

McEwan: A few years ago, I formed an organization at my
childrens' school that focuses on the relationships between fathers and their
children. Our goals are to encourage fathers to spend more quality time with
their kids and to become better role models. It sounds very fundamental, but I
found that there were a lot of other dads out there who, like me, were working
hard to achieve a balance between the rigors of a career and their
responsibilities as parents.

Our group stages social events, engages in community service, and does some
fundraising for the school. Involvement has been extremely rewarding, and we've
done some very positive things for our community.

Recently, we hosted about 150 mentally retarded adults and their chaperones
for a day of amusement rides and entertainment at a summer festival that I also
chair. My three children were there to help that day. We had a terrific time,
but more importantly, I know that the experience will in some small way help to
shape them into caring, responsible, and proactive