George Harms Const. Co., Inc. v. New Jersey Turnpike Authority

• Decision Date: 07 July 1994
• Citation: 137 N.J. 8,644 A.2d 76
• Parties: , 146 L.R.R.M. (BNA) 3037, 130 Lab.Cas. P 57,893 GEORGE HARMS CONSTRUCTION CO., INC., a New Jersey corporation, Ronnie Allen, Carlos Alvar, David Bader, Christine Baliko, William McMullan and Bruce Robertson, Appellants-Appellants, v. NEW JERSEY TURNPIKE AUTHORITY, a body corporate and politic, Respondent-Respondent. In the Matter of the ADOPTION OF A RESOLUTION BY the NEW JERSEY TURNPIKE AUTHORITY REQUIRING CONTRACTORS TO ENTER INTO PROJECT AGREEMENTS WITH LABOR UNIONS.
• Court: New Jersey Supreme Court

Page 8

137 N.J. 8

644 A.2d 76, 146 L.R.R.M. (BNA) 3037,

130 Lab.Cas. P 57,893

GEORGE HARMS CONSTRUCTION CO., INC., a New Jersey

corporation, Ronnie Allen, Carlos Alvar, David

Bader, Christine Baliko, William

McMullan and Bruce Robertson, Appellants-Appellants, v. NEW JERSEY TURNPIKE AUTHORITY, a body corporate and politic,

Respondent-Respondent.

In the Matter of the ADOPTION OF A RESOLUTION BY the NEW

JERSEY TURNPIKE AUTHORITY REQUIRING CONTRACTORS TO

ENTER INTO PROJECT AGREEMENTS WITH LABOR UNIONS.

Supreme Court of New Jersey.

Argued Jan. 31, 1994.

Decided July 7, 1994.

Theodore W. Geiser, for appellant George Harms Const. Co., Inc. (Connell, Foley & Geiser and Grotta, Glassman & Hoffman, attorneys; Mr. Geiser and Theodore M. Eisenberg, of counsel; Mr. Geiser, John F. Neary, Vincent E. McGeary, Guy T. Lytle, Michael Barabander, and Mark E. Tabakman, on the briefs).

Morris M. Schnitzer, for appellants Ronnie Allen, Carlos Alvar, David Bader, Christine Baliko, William McMullan and Bruce Robertson.

Steven E. Brawer, for appellant Utility & Transp. Contractors Ass'n of New Jersey, Inc. (Mandelbaum, Salsburg, Gold, Lazris, Discenza & Steinberg, attorneys).

Jeffrey J. Greenbaum, for respondent New Jersey Turnpike Authority (Sills, Cummis, Zuckerman, Radin, Tischman, Epstein & Gross, attorneys; Mr. Greenbaum and Clive S. Cummis, of counsel; Mr. Greenbaum, Kenneth F. Oettle, Mark S. Olinsky, and Paul P. Josephson, on the briefs).

Vincent J. Apruzzese, for amicus curiae U.S. Chamber of Commerce (Apruzzese, McDermott, Mastro & Murphy, attorneys; Mr. Apruzzese, Francis A. Mastro, and Daniel F. Crowe, on the brief).

Christine Piatek, Deputy Atty. Gen., for amicus curiae Atty. Gen. (Deborah T. Poritz, Atty. Gen., atty.; Joseph L. Yannotti, Asst. Atty. Gen., of counsel).

Michael J. Herbert, submitted a brief on behalf of amici curiae American Road & Transp. Builders Ass'n, the New Jersey Asphalt Pavement Ass'n, and The Nat. Utility Contractors Ass'n (Picco, Mack, Herbert, Kennedy, Jaffe & Yoskin, attorneys; Mr. Herbert, Patrick D. Kennedy, and Gregory J. Sullivan, of counsel and on the brief).

Frederick J. Rohloff and John C. Connell, submitted a brief on behalf of amici curiae The Associated Builders and Contractors, Inc., Associated Builders and Contractors of New Jersey, and Associated Builders and Contractors of Northern New Jersey (Archer & Greiner, attorneys).

Richard D. Wilkinson submitted a brief on behalf of amicus curiae Nat. Constructors Ass'n (Lowenstein, Sandler, Kohl, Fisher & Boylan, attorneys; Robert W. Kopp, a member of the New York bar, of counsel).

Michael Critchley submitted a brief on behalf of amici curiae New Jersey State Bldg. and Const. Trades Council and Bldg. and Const. Trades Department, AFL-CIO.

The opinion of the Court was delivered by

O'HERN, J.

This appeal presents the question of whether a State agency has the power to require a contractor doing business with it to enter into a "project labor agreement" with designated unions. A "project labor agreement" is a form of prehire agreement with labor organizations under which a contractor agrees to use the members of specified labor organizations on a project in exchange for the member unions' guarantees of labor stability. Such agreements serve important purposes in assuring efficient and economical administration of large construction projects. We hold, however, that our State public-bidding laws and the policies underlying them do not now contemplate the use of such agreements by State agencies to require contractors to hire members of only certain designated labor organizations to the exclusion of all others.

I

We base our opinion on the facts as represented by respondent, New Jersey Turnpike Authority (TPA).

In 1990, the TPA began to widen the Turnpike between Interchanges 11 and 15E (the Widening Project). The contracts for the Widening Project were subject to the competitive-bidding provisions of the "lowest responsible bidder" statute, N.J.S.A. 27:23-6.1(a). On August 24, 1993, George Harms Construction Co., Inc. (Harms) bid the lowest price to perform Contract No. W-6411, which covered the stretch of the Turnpike between Interchanges 14 and 15E, known as the "Southern Mixing Bowl." Harms's bid price was $20,464,360, and the next lowest bid was $20,542,393. However, on the same day, the TPA's Director of Law issued an internal memorandum recommending that the TPA award Widening Project contracts only to contractors that had entered into "project labor agreements." For authority, that memo relied on Building & Construction Trades Council v. Associated Builders & Contractors, Inc., 507 U.S. 218, 113 S.Ct. 1190, 122 L.Ed.2d 565 (1993) (Boston Harbor ), which established that the National Labor Relations Act (NLRA), 29 U.S.C.A. §§ 151 to 169, does not preempt the use of project-labor agreements by state agencies acting as market participants in the construction industry. On August 31, 1993, the TPA adopted Resolution 19-93, which provided, in pertinent part, the following:

WHEREAS, in consideration of the critical nature of timely completion of the 1990-95 Widening Project * * * and the recent labor disruption affecting the Widening Project, it is in the best interest of the Authority to implement the use of project labor agreements with respect to all construction contracts awarded heretofore and hereafter as part of the Widening Project;

NOW THEREFORE, BE IT RESOLVED that, for the foregoing reasons, as a condition of all contracts heretofore and hereafter advertised by the New Jersey Turnpike Authority in connection with the Widening Project, the Chief Engineer shall require contractors and subcontractors of all levels to enter into project labor agreements with the appropriate affiliated locals of the Building and Construction Trades Council of the AFL-CIO of the State of New Jersey * * *.

Resolution 19-93 defined a "project labor agreement" as

an agreement that recognizes designated unions as the exclusive bargaining representatives for all construction and craft employees, in exchange for the stipulation that there be no work stoppages, slowdowns, or disruptions during the life of the construction contract to which it applies, and which, therefore, contributes to a spirit of harmony, labor-management peace and stability during the life of that contract * * *.

Thus, Resolution 19-93 would have required the TPA to award the contract to the lowest-responsible bidder that had entered into a project-labor agreement with Building and Construction Trades Council (BCTC) unions.

The preference in the awarding of contracts allegedly stemmed from the State's concern that, in the words of Resolution 19-93, "the Authority ha[d] recently experienced labor disturbances namely work stoppages * * *." The TPA's Director of Law explained at the August 31, 1993, Executive Session that "[l]abor disturbances were threatened at Harms' construction site in the vicinity of Interchange 8A, and Harms requested that the [TPA] provide Harms' forces with State Police protection." The TPA's Chief Engineer was more specific: "[I]n light of the July 1993 statewide strike of highway and utility construction sites by Local 825 and the refusal of other AFL-CIO locals to cross Local 825's picket lines, any further strikes would cause intolerable delays in light of the [TPA's] December 1995 deadline for completion of the Widening." Such delays would have hampered New Jersey's efforts to comply with federal clean-air requirements by 1996 to obtain federal transportation funds, and certain permits from the Army Corps of Engineers might have expired if work had been interrupted.

The conflict between the BCTC-affiliated Operating Engineers Local 825 and the United Steelworkers of America (the Steelworkers), to which Harms's employees belong, apparently stems from a jurisdictional dispute. As we understand that dispute, it revolves around the contrasting work patterns of the two unions. Steelworkers members will apparently perform a wide variety of different tasks, such as operating heavy machinery, digging ditches, and carpentry. Members of Local 825, on the other hand, only operate heavy machinery. When BCTC unions are involved, carpentry and digging must be performed by members of the Carpenters' and Laborers' Unions, not by the International Union of Operating Engineers. ¹

On August 27, 1993, the TPA's Chief Engineer delivered a letter to Harms's president notifying Harms of a proposed project-labor-agreement requirement. The letter stated that the TPA would adopt the policy on August 31, 1993, and that the policy would apply to Contract No. W-6411 retroactively. The letter did not state that the policy would require Harms to sign the project-labor agreement with a BCTC affiliate. Harms assertedly discovered that fact when its counsel appeared at the TPA's Executive Session on August 31, 1993. Harms's counsel protested the policy because inasmuch as Harms had a long-standing collective-bargaining agreement with the Steelworkers, the NLRA precluded Harms from signing a project-labor agreement with any other union. However, the TPA disregarded Harms's objections and passed Resolution 19-93 as well as Resolution 25-93, which provided for the rejection of all current bids on Contract No. W-6411 to allow rebidding under the new policy. On September 15, 1993, the TPA's Executive Director denied Harms's appeals protesting the TPA's rejection of Harms's bid and refused to reinstate the bid.

On September 13, 1993, then-Governor Florio executed Executive Order No. 99, which required all State agencies to adopt project-labor agreements with BCTC affiliates "whenever feasible and whenever such agreement[s] substantially advance[ ] the interests of costs, efficiency, quality, safety, timeliness and the State's policy regarding minority- and women-owned businesses * * *." 25 N.J.R. 4543 (Oct. 4, 1993).

On September 14, 1993, Harms and some of its...