Lawsuit targets city labor agreements


March 19, 2021

The Cloquet City Council closed its meeting Tuesday to discuss legal strategies for pending litigation, shortly after amending the city’s project labor agreement, which is targeted by the civil lawsuit. Although no legal documents were shared through the city, the Pine Knot News was able to find the lawsuit by searching federal court records.

The city’s project labor agreement, or PLA — adopted in May 2017 by then-mayor Dave Hallback and the city council — is the issue, along with other PLAs in Duluth and Two Harbors and the Western Lake Superior Sanitary Sewer District.

The civil lawsuit was filed in U.S. District Court on Jan. 28 on behalf of an independent labor union, two union contractors, a non-union contractor and two individuals: one a union member, the other a non-union construction crew member.

Generally, under the terms of a PLA, construction unions have bargaining rights to determine the wage rates and benefits of all employees working on a project covered by a PLA. The terms of the agreement apply to all contractors and subcontractors working on the project, although they do not have to be union companies themselves.

According to the city staff report from May 2017, PLAs also typically require that employees hired for the project are referred through union hiring halls — in this case the Duluth Building and Construction Trades Council — and that non-union workers pay union dues for the length of the project. The contractor has to follow union rules on pensions, work conditions and dispute resolution. The Cloquet PLA also requires contractors to pay contributions to “established employee benefit funds,” overseen by the union.

The legal complaint asks the courts to stop the cities and WLSSD from enforcing their PLAs because they prohibit contractors from working on any public works project covered by the PLA unless they recognize a union affiliated with the Duluth Building and Construction Trades Council as the “exclusive representative of their employees — even if the contractor’s employees have chosen not to unionize, and even if the contractor’s employees have chosen a different union to represent them.” The complaint stated that the PLA also compels the employees of any contractor or subcontractor to become dues-paying members of a Council-affiliated union and maintain their union membership while working on a public works project subject to the PLA.

Although the council discussion regarding the lawsuit was held behind closed doors — in this case, a private online meeting — councilors did discuss the proposed changes to the PLA during Tuesday’s meeting, and verbally danced around the subject of the lawsuit.

When Ward 2 councilor Sheila Lamb asked if the council could hold its closed meeting and then vote on the PLA, Mayor Roger Maki pointed out that the pending litigation came with some timelines, and Peterson pointed out that the city’s attorneys need to respond to the litigation, so there was some urgency.

“If we do this, hopefully it would resolve one of the issues brought forward in the litigation,” Peterson said.

“Let’s do it,” said Ward 1 councilor Bun Carlson.

Council members then voted unanimously to remove language that required all employees covered by the agreement to “remain members of good standing in their respective Unions” or “become members of the respective Unions within seven days after their employment.” They also added language to the PLA stating that “nothing in this agreement” requires employees to join a union or pay fees to a union.

At issue

The lawsuit claims that the PLAs in each city and WLSSD violate the rights of contractors and their employees under both the First and Fourteenth Amendments to the U.S. Constitution, and also violate federal antitrust laws.

Cloquet’s PLA was somewhat controversial from the start. The Cloquet Economic Development Authority was not consulted before the council voted on the measure in 2017, and the EDA has since suggested at least twice that the council modify the PLA and remove the private business requirements.

Additionally, local businessman David Chmielewski initially said he would not build phase 3 of his 14th Street Apartments just over a month after the PLA was adopted. He did build, but only after the city changed the terms of its PLA, which initially applied to all city projects and any private projects with city funding or backing over $175,000. That was later changed to require private projects with city funding or backing of $175,000 or more, versus the total cost of the project.

Cloquet was the first city in the region to require a PLA on private projects.

Attorneys for the plaintiffs and two of the plaintiffs — Kaski Inc. of Duluth and Nordic Group Inc. of Carlton — did not respond to efforts to reach them Wednesday before deadline.


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