Whatcom County’s construction workers are 87 percent
open-shop and 13 percent union

The biggest public building project Whatcom County has ever undertaken is coming up, and rules under discussion now may effectively route these construction jobs away from local firms and workers.

Citizens voted in 2023 to replace the existing jail with a new justice facility and behavioral health treatment center. Its estimated cost is $175 million. That’s the big one. Two more upcoming public projects are also relevant: the 23-hour crisis relief center and a building on the Northwest Annex site.

What’s the problem? Proposed language within an early draft of the county ordinance would require the majority of the workforce to be hired through local union halls. Whatcom County’s construction workers are 87 percent open-shop and 13 percent union.

Lance Calloway is northern district manager of Associated General Contractors of Washington. AGC’s membership is half union and half open-shop contractors, mainly in the heavy civil, industrial and commercial sectors. The AGC was initially supportive of the county ordinance, called a community benefits agreement, which was intended to focus local workers on local public projects.

Then came the PLAs. A project labor agreement is a pre-hire requirement where the majority of the workforce must be hired via the local union hall. So, an open-shop contractor could put three or four open-shop workers on the project but would have to hire the rest from the union or join the union for the duration of the project.

No fair, say contractors. Many won’t bid if a PLA is in place because it puts them at a competitive disadvantage before they even start, Calloway said. Why? Open-shop contractors keep paying their employees’ health, dental and retirement benefits, but on projects with a PLA, they must also pay into the union health and pension trusts. In effect, that means many Whatcom County firms will skip it, seeking work further afield to keep their workforce employed, and out-of-area union contractors will step in to take Whatcom County’s public project jobs.

“The money that those out-of-area workers earn will leave our community,” Calloway said.

What’s the timing of these proposed rules? It’s been reported that the ordinance will be drafted in June, with the Whatcom County Council voting in September. That may be too late for local contractors.

“I hear on the street that the request for proposal for the jail project may be out in late May or early June, before the proposed community benefits agreement, potentially including PLAs, is finalized,” Calloway said.

He added that this ordinance, if passed, will affect future projects that the county will undertake.

A community benefits agreement is usually used with private development projects, intended to ensure it delivers tangible benefits such as affordable housing, a school or other amenities to the community in exchange for zoning variances or tax incentives.

“CBAs are more prevalent in private development because private companies may not have the same level of responsibility to local communities as public entities,” Calloway said.

Much of the proposed community benefits agreement with its PLA restates existing law, Calloway said, adding that existing laws ensure proper pay, safety and non-discrimination. Paying the prevailing wage is already law on public works projects regardless of size, and public projects exceeding $2 million have a 15 percent apprentice requirement to build the workforce. Benefits beyond that force up the project’s cost and are better negotiated per project between county and contractor, rather than a blanket ordinance, Calloway said.

“Have the benefits match the project,” Calloway said. “Benefits should be up to the owner of the project; in this case taxpayers, and what they’re willing to pay for. It’s like buying the base model of a car and then choosing upgrades. In a building project, the upgrades could be green building techniques, or child care offered to the workforce. Those added costs are for the owner, not the contractor, to absorb.”

PLAs reduce the pool of bidders and increase construction costs 13 to 21 percent, Calloway said.

“We ask for PLAs to be removed from the ordinance to allow for fair and open bidding for union and open-shop contractors,” he said. “Contractors should be able to hire subcontractors based on the project’s needs, helping keep costs within budget.”

PLAs effectively discriminate against certified small businesses and minority- and women-owned companies, which are even more likely to be open-shop, Calloway said.

Pete Dawson, CEO of Dawson Construction, was quoted in Cascadia Daily News saying “it’s not a matter of if, it’s a matter of how much more, your project will cost” with a PLA.

Gov. Gavin Newsom of California in 2024 vetoed PLAs, citing the additional cost and lack of prudence in spending taxpayer money.

 Calloway said the Associated General Contractors of Washington is asking for a fair and equitable bidding environment for large public works projects, rather than one that favors unionized firms and workers.

“This is not an anti-labor stance but a pro-worker choice,” he said.

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