Federal judge dismisses union lawsuit against Branstad

CEDAR RAPIDS - It appears City Hall made the right decision not to test Gov. Terry Branstad in court over the city's desire to use a project labor agreement with local labor unions on the city's Convention Complex project.

Instead, the city and the Cedar Rapids/Iowa City Building Trades Council agreed to set the project labor agreement aside on the Convention Complex project, though the trades council along with the Central Iowa Building and Construction Trades Council did go to federal court against Branstad over similar agreements on two other projects, the University of Iowa's medical clinic at Iowa River Landing in Coralville and the expansion of the Iowa Veterans Home in Marshalltown.

Branstad ordered project labor agreements on those two state projects set aside upon taking office in January, prompting the lawsuit.

On Wednesday, Judge John Jarvey of the U.S. District Court for the Southern District of Iowa in Des Moines granted Branstad's request to dismiss all aspects of the union lawsuit.

In a written statement, the Governor's Office credited the governor's attorneys for having the lawsuit dismissed quickly before trial, "saving" the state of Iowa tens of thousands of dollars in litigation costs.

Scott Smith, president of the Cedar Rapids/Iowa City Building Trades Council, last night called the court ruling "very disappointing." He said the council was "taking a step back to reassess our options at this point."

In its lawsuit, the unions argued that Branstad's executive order was pre-empted by the National Labor Relations Act; that it violated the unions' federal rights; that it breached contracts on the two state projects; and that it violated the Iowa State Constitution by improperly performing a legislative function.

In his analysis, Judge Jarvey noted that the National Labor Relations Act "explicitly allows" project labor agreements or "pre-hire agreements" in the construction industry. He cited a U.S. Supreme Court ruling in 1993 in a Massachusetts case that calls the agreements "useful" because of "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 pre-hire bargaining in the industry."

At the same time, project labor agreements can be "anti-competitive" and "have the effect of freezing out employees of non-union contractors by limiting the number of their employees they are allowed to use on a project," Jarvey noted, paraphrasing a dissenting opinion in a 2002 case in front of the Iowa Supreme Court case.

In the current case, Gov. Branstad supports the latter idea that project labor agreements are anti-competitive, Jarvey said.

Jarvey stated that Branstad's executive order would be in violation of the National Labor Relations Act if the order is "regulatory" in nature. However, Jarvey concluded that Branstad's action in issuing the executive order prohibiting project labor agreements is not regulatory, but is allowed because the governor and the state of Iowa are the proprietors of state construction projects.

"The State, as the proprietor of its construction projects, can make the decision not to pay union wages or operate under union conditions," Jarvey concluded.

"This is a business decision that does not come in conflict with the NLRA because it is not designed to have a broad social impact, rather, the stated purpose is to administer proprietary projects more efficiently," he said.