OP-ED: Contractors, Take These Actions To Avoid Union Pension Liability

Union pension trustees wield significant legal power over any employer that has contributed to a union pension trust as well as any employer that should have contributed, but failed to do so. Let's start with an example to demonstrate one way this liability presents itself.

Fred owns a small nonunion electrical company. He bids on a new downtown construction project and understands that there is going to be a labor harmony clause in the subcontract. He bids on nonunion rates and wins. He soon discovers that he must sign a project labor agreement (PLA). Although his profit will now be tight, he goes forward with the project.

At the time, union business agents assure Fred that only the installers have a classification under the collective bargaining agreement (CBA), and service technicians do not. Therefore, the company need not make pension contributions for the service techs. When the project ends, the union notifies Fred that his PLA contained language whereby