Opinion ID: 2033758
Heading Depth: 1
Heading Rank: 3

Heading: The Thruway Authority Case

Text: Respondent Thruway Authority is a public benefit corporation created by a special act of the Legislature (L 1950, ch 143) and responsible for constructing and maintaining the New York State Thruway ( see , Public Authorities Law § 352). In that connection the Authority had charge of a major construction project to improve the Governor Malcolm Wilson (Tappan Zee) Bridge. Originally opened in 1955, the Tappan Zee Bridge spans the Hudson River between Rockland County on the west and Westchester County on the east. The Bridge carries Interstate Route 87, which extends north and west from Rockland County in the direction of Albany, Canada and Buffalo, and east and south to New England and New York City. Approximately 60,000 toll-paying vehicles flow across the Bridge daily  and tolls are collected only from eastbound traffic. In 1993, 20,647,930 toll-paying vehicles crossed the Bridge, generating $45,920,519 in revenue for the Thruway Authority. At issue is a four-year project to refurbish the Tappan Zee Bridge  the largest such construction project since the Bridge was built. A significant portion of the work involves deck replacement, which entails reducing the number of lanes available to traffic while work is in progress. Thus, the Thruway Authority determined that efficiency in completing the project, once commenced, is important to protect a major revenueproducing asset, maximize public safety, and minimize inconvenience to the traveling public. Of the 23 major construction projects on the Tappan Zee since it was built, the successful bidder in 20 was a union contractor. In fact, union contractors had performed more than 90% of the total dollar volume of work on the Bridge. Based on the size and complexity of the pending project, the Thruway Authority predicted that it would be subject to the jurisdiction of some 19 local unions with separate labor contracts having different starting times, scheduling restrictions, holidays, grievance resolution procedures, and other terms and conditions of employment. In 1992, the last time a contract was awarded to a nonunion contractor, the Tappan Zee's first labor dispute erupted. The dispute required the assistance of the State Police to insure the safety of the contractor's employees, and the Bridge itself was picketed. After receiving an August 1993 memorandum from the Governor's office advising of the Boston Harbor decision and recommending consideration of PLAs for future projects, the Authority retained a consultant to investigate the issue for the Tappan Zee project. Based on concessions won from local unions, uniform scheduling and enhanced flexibility with work shifts, the consultant's detailed report estimated labor savings if a PLA were adopted of at least $6 million, or 13.51% of the anticipated labor cost for the project. Additionally, with a PLA, the Authority would maximize its ability to maintain toll revenues throughout the construction period. After months of negotiation, an agreement was signed and the Thruway Authority included the PLA in the bid documents The PLA, which binds anyone working on the project, provides that the signatory unions shall be recognized as the exclusive bargaining representatives of all craft employees working at the project. The agreement incorporates the local collective bargaining agreements of the signatory unions and makes them binding on all successful bidders. It requires that contractors secure a minimum of 88% of their labor through the labor hall referral system (thus allowing contractors to retain up to 12% of their current work force). The PLA, however, prohibits discrimination in referrals on the basis of union affiliation. Additionally, the PLA requires every employee and contractor, regardless of union affiliation, to pay union dues and contribute to employee benefit funds. It provides uniform work rules for all trades, establishing standard hours of work per day and per week. Finally, the PLA sets forth mandatory dispute resolution procedures and expressly prohibits strikes or other labor disruptions. Immediately after the Thruway Authority issued its specifications, including the PLA, for bridge structural steel repairs, appellants (trade organizations representing contractors and suppliers, a contractor, as well as two individuals claiming to represent the interests of taxpayers and tradespersons) commenced a CPLR article 78 proceeding seeking a declaration that the PLA was unlawful and illegal, and an order halting the bidding process. Unions representing the construction trades and an association of unionized construction employers intervened. Adopting the reasoning of New Jersey's Harms decision, Supreme Court concluded that the policy of using PLA's contravenes two of the purposes of [the competitive bidding statutes] in discouraging competition by deterring nonunion bidders, and fostering favoritism by dispensing advantages to unions and union contractors. The Appellate Division reversed, dismissed the petition, and declared that the Thruway Authority did not violate competitive bidding requirements: Assuming that the use of the PLA somehow discourages competition in the bidding process    [w]e conclude that the Thruway Authority's decision to use the PLA at issue in this case is rationally based upon reasons in the public interest promoted by the competitive bidding statutes (207 AD2d at 30-31). We agree. Apart from a measure of independence explicitly delegated to the Thruway Authority ( see , Public Authorities Law § 359 [1]; see also , Matter of Plumbing, Heating, Piping & Air Conditioning Contrs. Assn. v New York State Thruway Auth. , 5 N.Y.2d 420), we note that in adopting a PLA the Authority assessed specific project needs and demonstrated that a PLA was directly tied to competitive bidding goals. Importantly, the PLA cannot be said to promote favoritism or cronyism because the PLA applies whether the successful bidder is a union or nonunion contractor and discrimination against employees on the basis of union membership is prohibited. The fact that certain nonunion contractors may be disinclined to submit bids does not amount to the preclusion of competition we identified in Gerzof as violative of the competitive bidding mandate. The Thruway Authority's detailed focus on the public fisc  both cost savings and uninterrupted revenues  the demonstrated unique challenges posed by the size and complexity of the project, and the cited labor history collectively support the determination that this PLA was adopted in conformity with the competitive bidding statutes. Agreeing with the Appellate Division as to appellants' remaining contentions, we therefore affirm the order upholding the Thruway Authority's decision to use the PLA for the Tappan Zee project.