NEW YORK — After decades of relative peace, a labor war between New York’s construction unions and real estate developers has broken out.
Anti-union ads are showing up in the subways and in the newspapers targeting “union boss Gary LaBarbera.” In the courts, the two sides have traded lawsuits and complaints claiming corruption and unfair labor practices.
This month, in the most visible skirmish yet, thousands of union lathers, electricians, laborers, ironworkers and carpenters from work sites across Manhattan poured into the intersection of 40th Street and Seventh Avenue near Times Square for a rally against the city’s largest developer, Related Cos.
Against the sound of a marching band with drummers and bagpipes and honking support from passing motorists, the workers and union officials vowed to “keep New York City a union town.”
LaBarbera, president of the Building and Construction Trades Council of Greater New York, an umbrella group for construction unions, railed at Related, saying the company “continues to look for deeper and deeper concessions, while they’re selling condos for $32 million.”
Labor leaders contend that Related is attempting to diminish the unions’ collective bargaining strength and is now attacking the very labor leader it once praised. But Joanna Rose, a spokeswoman for Related, said LaBarbera has shown bad faith. “We will not negotiate with Gary again. He hasn’t lived up to his obligations. Why would we negotiate with a party who says he can’t enforce the agreement?” she said.
Related is not alone in seeking to cut labor costs, eliminate what it says are antiquated work rules and overhaul the once relatively harmonious relationship between unions and developers. In this battle, “Related is leading the charge,” said developer Douglas Durst.
The roots of the current crisis lie in the 2008 recession that followed a debt-fueled real estate boom. Projects collapsed, lending ceased and apartment buyers disappeared.
But the cost of construction materials and land escalated. So developers and contractors who had projects pushed to cut labor costs.
Gradually over the last decade, nonunion contractors gained a foothold in the city, moving over time from smaller projects to high-rise residential buildings for developers who once used union labor exclusively. Some nonunion workers are paid as little as $15 an hour with few, if any, benefits or training, compared with some experienced union workers who earn $93 an hour in wages and benefits.
One study for the carpenters union indicates that organized labor now accounts for only 65 percent of the projects in Manhattan and a mere 39 percent of the work in Queens, Brooklyn, Staten Island and the Bronx.
LaBarbera acknowledged that union labor is more costly, but argued that unionized workers are better trained and work faster and more safely. In addition, he said that well-paid construction work has long provided a path into the middle class.
To compete, however, LaBarbera and the unions have made what they said were substantial wage and work-rule concessions in what were known as “project labor agreements,” which include a no-strike pledge.
Related signed one of the first agreements in January 2013 for the initial phase of its $25 billion residential and commercial project at Hudson Yards, where 4,000 workers labor on any given day.
Another 131 agreements with builders in the private and public sectors followed, covering $64 billion worth of construction, according to LaBarbera.
But developers such as Related and Gotham Construction have argued that the labor agreements did not provide anywhere near the savings the unions had promised. And union contractors have continued to lose work to nonunion builders, especially in residential construction, although they remain dominant on large office buildings and public works.
“This has gone from one of the most highly unionized sectors of the American economy to one where huge chunks of it now operate on a nonunion basis,” said Joshua B. Freeman, a labor historian at the City University of New York. “There’s been a slow chipping away of union clout.”
Increasingly, developers who had customarily done all-union jobs have turned to “open shops,” in which union contractors compete against nonunion outfits for work.
At the Times Square rally, Bryant Nunez, a Marine veteran and a second-year apprentice with the ironworkers union, said, “The nonunion guys are taking our work. It’s pretty much a bread-and-butter issue for me.”
Related insists that its intention is not to break the unions, but to hold unions to their agreements. The company says that some have not made negotiated changes, like having work crews include more apprentices, paid at a lower wage, in order to bring costs down.
Last year, Gov. Andrew M. Cuomo sided with the construction unions, insisting that developers participating in a citywide affordable housing program must pay minimum wage rates that the unions argued would allow them to better compete for work. But it is not clear that the change has resulted in the unions’ getting more work on residential projects.
Although Related has been the most aggressive in its approach to the unions, the industry’s powerful Real Estate Board of New York has also taken up the cause. The unions, said John Banks, president of the board, have “chosen to try and apply pressure through the political process and aggressive public theatrics, rather than reform of their work rules and benefit structure. These futile efforts will result in such unions losing even more market share.”
More recently, construction unions have come under attack more broadly, with critics like the Regional Plan Association and Citizens Budget Commission criticizing union agreements in the public sector for driving up the cost of subway construction and work at the city’s housing authority. Union leaders say the criticism is unfair and blame poor decision-making by management and an unwieldy bureaucracy.
Related has grown more aggressive with the unions as the first phase of its Hudson Yards project nears completion. It is building the nearby tower at 55 Hudson Yards under open-shop conditions, although 92 percent of the workers are union members, according to Related. The company has also started the foundation of another tower at 50 Hudson Yards using nonunion workers and a small contingent of union carpenters.
A few years ago, Related executives expressed support for LaBarbera, but in February Related filed a lawsuit in federal court against him and the Building and Construction Trades Council, claiming that they and some of the unions had violated the labor agreements and bilked the company out of more than $100 million through “various corrupt practices.”
Executives at Related say they will no longer negotiate with LaBarbera, ending a century-old tradition in which the council bargained on behalf of more than a dozen unions. The developer also said it would no longer work with the laborers, lathers and electricians unions because they had refused to live up to the labor agreements. From now on, it would deal with the other unions individually.
LaBarbera and other union leaders view the lawsuit as an attempt to divide and conquer the labor movement, as well as retaliation for a pro-union rank-and-file movement, #CountMeIn. The group had been holding a weekly picket line at 50 Hudson Yards to protest nonunion contractors.
“Related wants to pick and choose who they want to use,” LaBarbera said. “Related’s been driving all this for some time.”
William Wachtell, the lawyer who filed the lawsuit on behalf of Related, adamantly denied the union-busting charge.
“It’s about working with the majority of unions that are honest,” Wachtell said. “The fact that Gary LaBarbera made this about an all-or-none proposition is his error in judgment.”
But some union officials said that Related’s aggressive posture is linked to cost overruns and mistakes made on the first tower at Hudson Yards, which they blame on the construction manager.
“I’ve done everything I could to work with them,” said Terry Moore, the business manager and financial secretary-treasurer for Local 46 of the lathers union. “But the next job starts and it wasn’t enough. They want more.”
The Trades Council recently filed a complaint with the National Labor Relations Board charging that Related had engaged in unlawful surveillance, interrogation and threats against union members wearing pro-union stickers on their hard hats or carrying pro-union signs at Hudson Yards. The mason tenders union has also filed complaints with the board against Trade Off Construction Services, a relatively new nonunion company that supplies low skill workers for construction, saying it fired workers illegally when they complained about safety or working conditions. Also, the state attorney general’s office has opened a preliminary investigation into wrongdoing at Trade Off, which pays about $15 an hour.
And several unions have jointly filed suit against a nonunion concrete company that Related hired to work at 50 Hudson Yards, saying it is being used to avoid paying union wages and benefits on the job.
Rose, the spokeswoman for Related, dismissed the lawsuit as “frivolous.”
David Stronger, a union electrician who attended the raucous rally in Times Square after finishing his shift at Hudson Yards, said he feels that his livelihood is under attack both locally and nationally.
“I think about half our work now is nonunion,” Stronger said. “Without the unions, it’s a race to the bottom. They pay as little as they can. It doesn’t just hurt us, it brings the whole economy down.”
This article originally appeared in The New York Times.