Associated Builders and Contractors, Inc. v. San Francisco Airports Com.

Page 654

87 Cal.Rptr.2d 654

21 Cal.4th 352, 981 P.2d 499, 161 L.R.R.M. (BNA) 3166,

139 Lab.Cas. P 58,692,

99 Cal. Daily Op. Serv. 6588,

1999 Daily Journal D.A.R. 8397

ASSOCIATED BUILDERS AND CONTRACTORS, INC., Golden Gate Chapter, et al., Plaintiffs and Appellants, v. SAN FRANCISCO AIRPORTS COMMISSION, Defendant and Respondent San Mateo County Building and Construction Trades Council, AFL-CIO, Real Party in Interest and Respondent.

No. S066747.

Supreme Court of California

Aug. 16, 1999.

Thierman Law Firm, Mark A. Thierman, George P. Parisotto, Robert Fried, San Francisco, Donald G. Ousterhout and Alice K. Conway for Plaintiffs and Appellants.

Chapman & Intrieri, San Francisco, and Mark G. Intrieri for the Bay Area Black Contractors' Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

Cox, Castle & Nicholson, John S. Miller, Jr., and Herbert Jay Klein, Los Angeles, for Associated General Contractors of California, Inc., as Amicus Curiae on behalf of Plaintiffs and Appellants.

Jan S. Amundson, Quentin Riegel, Washington, DC; Stephen A. Bokat, Susan Mahallati; Fred Main; Cook, Brown, Rediger & Prager and Dennis B. Cook, Sacramento, for the National Association of Manufacturers, the Chamber of Commerce of the United States of America and the California Chamber of Commerce as Amici Curiae on behalf of Plaintiffs and Appellants.

Cook, Brown, Rediger & Prager, Dennis B. Cook and Jessavel Y. Delumen, Sacramento, for the Hispanic Contractors Association, Sacramento Economic Empowerment

Congress and Northern California Minority Trades Council as Amici Curiae on behalf of Plaintiffs and Appellants.

Louise H. Renne, City Attorney; Mara E. Rosales, San Francisco; Morrison & Foerster, San Francisco, Harold J. McElhinny, San Francisco, David K. Barrett, Los Angeles, and Sue C. Hansen, San Francisco, for Defendant and Respondent.

N. Gregory Taylor, Marcia Scully, Irvine, John C. Clairday; Morgan, Lewis & Bockius and Andrew C. Peterson, Los Angeles, for Metropolitan Water District of Southern California as Amici Curiae on behalf of Defendant and Respondent.

Sherman, Dunn, Cohen, Leifer & Yellig, Victoria L. Bor, Washington, DC; Altshuler, Benzon, Nussbaum, Berzon & Rubin and Peter D. Nussbaum, San Francisco, for the Building and Construction Trades Department, AFL-CIO and the California State Building and Construction Trades Council, AFL-CIO as Amici Curiae on behalf of Defendant and Respondent.

Bartkiewicz, Kronick & Shanahan, Alan B. Lilly and David T. Sammond, Sacramento, for Yuba County Water Agency as Amicus Curiae on behalf of Defendant and Respondent.

John R. Gallo, City Attorney (San Jose), Clifford S. Greenberg and Timothy S. Spangler, Deputy City Attorneys, for the City of San Jose and 13 California Cities as Amici Curiae on behalf of Defendant and Respondent.

Van Bourg, Weinberg, Roger & Rosenfeld, Victor J. Van Bourg, Sandra Rae Benson, Oakland, Stanley S. Mallison and Theodore Franklin for Real Party in Interest and Respondent.

Morton H. Orenstein, San Francisco, for Construction Employers Association, the Northern California Drywall Contractors Association, the Millwright Employers Association, the Modular Installers Association and the Western Steel Council as Amici Curiae on behalf of Defendant and Respondent and Real Party in Interest and Respondent.

WERDEGAR, J.

We granted review in this case to decide whether the project stabilization agreement (PSA) executed by defendant San Francisco Airports Commission (the Commission) and real party in interest San Mateo County Building and Construction Trades Council, AFL-CIO (the Trades Council), in order to accomplish the $2.4 billion expansion and renovation of the San Francisco International Airport, violates competitive bidding laws or certain other statutory or constitutional provisions.

The PSA involved in the present case exacts from the signatory unions over the expected 10-year life of the project a no-strike pledge, an agreement to arbitrate jurisdictional disputes among crafts, and a promise to continue work on the project despite the expiration of any applicable collective bargaining agreements. In exchange, the Commission agrees to require all contractors to accept the terms of the PSA, to abide by each craft's labor-management grievance procedure in cases of discipline or discharge, and to use the union hiring hall for any new hires needed beyond the employer's own core workforce. Employers are also required to pay union wages and benefits. ¹

The PSA is an example of a type of prehire agreement designed for large and complex construction projects. It is designed to eliminate potential delays resulting from labor strife, to ensure a steady supply of skilled labor on the project, and to provide a contractually binding means of resolving worker grievances. Such agreements, also called project labor agreements, have long been used in large construction projects undertaken by both private concerns and, especially following the decision of the United States Supreme Court in Building & Constr. Trades Council v. Associated Builders & Contractors of Mass./R. I., Inc. (1993) 507 U.S. 218, 113 S.Ct. 1190, 122 L.Ed.2d 565 (Boston Harbor ), public agencies. Boston Harbor held that the National Labor Relations Act (29 U.S.C. § 151 et seq.) (NLRA) does not preempt a public agency, acting as the owner of a construction project, from mandating an otherwise lawful project labor agreement as a bid specification for the project. (Boston Harbor, supra, at pp. 231-232, 113 S.Ct. 1190.)

In order to protect the right of workers freely to choose their bargaining representatives, the NLRA generally prohibits prehire agreements. By enacting what is often called the construction industry proviso in 1959 (see 29 U.S.C. § 158(f)), however, Congress recognized that special conditions prevailing in the construction industry warrant an exception to the general rule. Because of the typically short-term and occasional nature of employment with any given employer in the construction industry, Congress determined that "[r]epresentation elections in a large segment of the industry are not feasible to demonstrate ... majority status...." (Sen.Rep. No. 187, 86th Cong., 1st Sess., p. 55 (1959), reprinted at 1 Nat. Lab. Relations Bd., Legislative History of the Labor-Management Reporting and Disclosure Act of 1959 (1985) pp. 451-452 (1 Legislative History); see NLRB v. Iron Workers (1978) 434 U.S. 335, 348-349, 98 S.Ct. 651, 54 L.Ed.2d 586.) That is, a construction project might be completed and the workers dispersed to other jobs before a union could achieve certification through the often lengthy election process. Strikes, as an alternative to the election process, carried their own potentially extreme costs for both workers and employers. The construction industry developed its own solution to this problem, in the form of prehire agreements. As described in the Senate Report discussing the 1959 amendments to the NLRA: "In the building and construction industry it is customary for employers to enter into collective bargaining agreements for periods of time running into the future, perhaps 1 year or in many instances as much as 3 years. Since the vast majority of building projects are of relatively short duration, such labor agreements necessarily apply to jobs which have not been started and may not even be contemplated.... One reason for this practice is that it is necessary for the employer to know his labor costs before making the estimate upon which his bid will be based. A second reason is that the employer must be able to have available a supply of skilled craftsmen ready for quick referral. A substantial majority of the skilled employees in this industry constitute a pool of such help centered about their appropriate craft union. If the employer relies upon this pool of skilled craftsmen, members of the union, there is no doubt under these circumstances that the union will in fact represent a majority of the employees eventually hired." (Sen.Rep. No. 187, 86th Cong., 1st Sess., p. 28, supra, reprinted at 1 Legislative History, supra, at p. 424.) The construction industry provision of the NLRA (29 U.S.C. § 158(f)) removed any question regarding the legality, under federal labor law, of the standard prehire agreement, although it did not resolve other constitutional and state law issues such as those involved in the present case.

Bids for the international terminal contract, the largest contract in the airport expansion project, were due July 11, 1996. On that day, Associated Builders and Contractors, Inc., Golden Gate Chapter, and the Asian American Contractors Association, Inc. (AACA) (collectively, ABC), appeared in the San Francisco County Superior Court seeking a writ of mandate to strike the PSA requirement from the bid specifications, arguing the PSA is unconstitutional and violates state competitive bidding statutes. Following a hearing on the merits, the superior court denied the petition, ruling that the PSA is not unconstitutional and finding no inconsistency between the PSA and the competitive bidding laws. The Court of Appeal affirmed. That court held: the decision to use a PSA for the airport expansion project is a matter of local concern governed by San Francisco's Administrative Code rather than the California Public Contract Code; regardless of whether state or local law applied, the PSA does not violate competitive bidding laws; the PSA does not violate ABC's constitutional rights; and ABC lacks standing to assert violations of its workers' rights under the Labor Code.

We granted ABC's petition for review.

DISCUSSION

Standard of review

On appeal from the denial of a writ of mandate, courts generally review an administrative agency's action under the substantial evidence test. We do not inquire whether, if we had the power to do so, we would have taken the action taken by the agency. (Western States Petroleum Assn. v....