Opinion ID: 2054068
Heading Depth: 1
Heading Rank: 4

Heading: Does the Boston Harbor decision preemptively determine the validity of the TPA's project-labor-agreement resolution?

Text: In his August 24 memorandum to the Executive Director of the TPA, the agency's Director of Law referred to the Boston Harbor decision as the legal basis for the TPA's adoption of Resolution 19-93: Recent analysis by General Counsel of the [ Boston Harbor ] case confirms that the New Jersey Turnpike Authority could legally enforce pre-hire arrangements between contractors and labor unions working on the Turnpike. Specifically, the Authority, by way of supplemental bid specifications, could require that a contractor on a given construction project enter into a project labor agreement guaranteeing stability for the life of the project. The issue in Boston Harbor was whether the Massachusetts Water Resource Authority could require as a condition for a contract award that the winning bidder and its subcontractors abide by a project-labor agreement previously negotiated between Kaiser Engineers, Inc. and the Boston Metropolitan District BCTC. That agreement recognized BCTC as the exclusive bargaining representative for all workers employed to build sewage-treatment facilities for the cleaning of Boston Harbor in return for BCTC's promise of labor peace throughout the ten-year life of the construction project. Specifically, the question was whether the agreement violated the NLRA. Two types of federal-labor-law preemption forbid certain kinds of state action. They are succinctly described in Boston Harbor as follows: The first, Garmon pre-emption, forbids state and local regulation of activities that are protected by § 7   , [which establishes the right of employees to organize, bargain collectively, and engage in peaceful picketing and strikes,] or constitute an unfair labor practice under § 8.            A second pre-emption principle, Machinists pre-emption, prohibits state and municipal regulation of areas that have been left `to be controlled by the free play of economic forces.' [ Boston Harbor, supra, ___ U.S. at ___, 113 S.Ct. at 1194-95, 122 L.Ed. 2d at 574-75 (citations omitted) (quoting San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244, 79 S.Ct. 773, 779, 3 L.Ed. 2d 775, 782 (1959), and Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 140, 96 S.Ct. 2548, 2553, 49 L.Ed. 2d 396, 403 (1976) (quoting NLRB v. Nash-Finch Co., 404 U.S. 138, 144, 92 S.Ct. 373, 377, 30 L.Ed. 2d 328, 333 (1971))).] That latter preemption principle is well illustrated by Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 106 S.Ct. 1395, 89 L.Ed. 2d 616 (1986), in which the Court held that federal labor law preempts a city's power to condition the renewal of a taxi franchise on settlement of a labor dispute. The theory of the Boston Harbor decision is that when a state acts as a market participant, it does not act as a regulator in areas of national labor policy that are preempted by the NLRA. Justice Blackmun wrote: When we say that the NLRA pre-empts state law, we mean that the NLRA prevents a State from regulating within a protected zone, whether it be a zone protected and reserved for market freedom, or for NLRB jurisdiction. A State does not regulate, however, simply by acting within one of these protected areas. When a State owns and manages property, for example, it must interact with private participants in the marketplace. In so doing, the State is not subject to pre-emption by the NLRA, because pre-emption doctrines apply only to state regulation.         It is evident from the face of the statute that in enacting exemptions authorizing certain kinds of project labor agreements in the construction industry, Congress intended to accommodate conditions specific to that industry. Such conditions include, among others, the short-term nature of employment which makes post-hire collective bargaining difficult, the contractor's need for predictable costs and a steady supply of skilled labor, and a long-standing custom of prehire bargaining in the industry. There is no reason to expect these defining features of the construction industry to depend upon the public or private nature of the entity purchasing contracting services. To the extent that a private purchaser may choose a contractor based upon that contractor's willingness to enter into a prehire agreement, a public entity as purchaser should be permitted to do the same. [ Boston Harbor, supra, ___ U.S. at ___, ___, 113 S.Ct. at 1196, 1198, 122 L.Ed. 2d at 575-76, 578-79 (citations omitted).] Thus, under Boston Harbor, federal labor law does not prohibit a state entering the construction market from using the same construction-industry exception regarding project-labor agreements that private purchasers of construction labor use. However, a state's laws may prohibit a project-labor-agreement specification in public contracts without running afoul of the NLRA. Garmon preemption does not apply because a state-law prohibition of project-labor agreements on public projects is merely one way in which a state may choose to act as a market participant in the construction industry. In other words, a state may choose to enter or not to enter a project-labor agreement just like any other purchaser of construction services. Machinists preemption also does not apply because a state-law prohibition of project-labor agreements on public projects does not constitute impermissible regulation of an area that the NLRA contemplated would be left to the free play of economic forces. Such a prohibition amounts to nothing more than the public equivalent of a corporation's by-law regarding the purchase of construction services. In short, when a state uses project-labor agreements on public projects, it is not acting as a regulator of private actors; rather, it is merely defining its role as a proprietor/purchaser of labor in the construction industry. Thus, because the NLRA does not preempt the field, we must determine whether New Jersey law prohibits project-labor agreements.