New Jersey Business Association Challenges Union Boondoggle Requirement Of Mandatory Apprenticeship Program For Construction Employers

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I do a great deal of prevailing wage defense on behalf of employers, both on a federal level (i.e. Davis-Bacon Act) and the State of New Jersey prevailing wage statute.  It sometimes seems that trade unions are able to aggressively lobby the NJDOL to take administrative actions that militate against non-union employers or make it harder for such employers to conduct their construction businesses.  One prime example of this is the law that mandates construction contractors (e.g. those doing public work) to be affiliated with an apprenticeship program.  Well, a trade association, the New Jersey Electronic Life Supply Association (“Association”), represented by my Partner, Beth Hampton, has now challenged that requirement in federal court.  The case is entitled Centcom Corporation et al. v. New Jersey Department of Labor and Workforce Development and was filed in federal court in the District of New Jersey.

The suit alleges that this requirement precludes Association members, particularly smaller entities, from meeting existing contracts and was really a boondoggle to the trade unions, which are very powerful in New Jersey.  The Complaint notes that “this preference was enacted … to reward political favor and to ensure that every public contractor in the state of New Jersey was part of and contributed to a union, and for no other legitimate purpose.”

The Association maintains that the apprenticeship requirement impermissibly favors union contractors, because one manner to secure compliance with this mandate is to be in a collective bargaining relationship with a Union, as the unions have access to various government-approved apprenticeship programs.  Members of this Association, made up of companies that install safety systems (e.g. fire detection), have the additional obstacle that the US Department of Labor has not sanctioned an apprenticeship program for entities that install safety systems.

Thus, these companies cannot renew their registration certificate with the NJDOL, which allows them to perform public work.   As a result, the entities cannot service the systems that they themselves installed.  The Association alleges that because these systems are unique, the State would be compelled to install new safety systems in many public buildings.

The Association charges that this apprentice requirement violates the contracts clause of the U.S. Constitution, a clause that precludes the States from enacting laws that impede the performance of contracts.  The Association also charges that the statute violates the due process clause by, de facto, stopping these companies from conducting their businesses as well as the First Amendment by discriminating against contractors based on their association (or lack of such association) with a union.  The plaintiffs seek declaratory and injunctive relief, i.e., an order declaring the law unconstitutional.

As Ms. Hampton aptly put it, “hardworking small business owners who have invested their life’s work in building a business from the ground up and who have for decades established and worked under contracts with municipalities, boroughs and cities in our state are being deprived by state law from continuing existing contracts unless they establish an apprenticeship program.”

The Takeaway

The prevailing wage laws are, in a sense, the great equalizer.  Employers, whether union or non-union, must pay the same wages and benefits on a public project.  So far so good.  But, the NJDOL has not only expanded the definition of “public work” but has also enacted measures that seem to facilitate union organizing.  Like this apprenticeship rule.

We’ll see where the lawsuit goes…

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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