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Associated Builders and Contractors v. Director7/19/2005
nd it, under a market recovery program a union may sacrifice wages in order to ensure that a unionized contractor can compete for the award of a contract for a given project. Such market recovery programs allow the modification of wages, fringes, and work rules on a job-by-job basis. Thus, for example, the union may agree that operating engineers, who under the collective bargaining agreement with the unionized contractor are entitled to $25 per hour, will receive $23 per hour. As the defendants/intervenors frankly concede, unions institute such market recovery programs in the face of nonunion competition that pays a lower wage scale. Theoretically at least, the cumulative effect of the lower wages that the unionized contractor will pay allows that contractor to be competitive in bidding for projects and therefore "recover" the market that the contractor would otherwise have lost.
As I understand it, a job targeting program is a device for equalizing the pay of union members whose unionized contractor employer has successfully won a contract under a market recovery program. Using again the example of operating engineers who will make $23 per hour on a project pursuant to a market recovery program, the union will "target" that lower salary and will make up the difference between what the operating engineers would otherwise earn under the collective bargaining agreement, $25 per hour, with a subsidy from a job targeting fund that the union collects from the entire bargaining unit through additional dues.
The Saginaw ABC labels these programs a "recent form of obnoxious collusion" and asserts that, by effectively establishing a two-tier rate system, they "taint" the collective bargaining process in relation to the Prevailing Wage Act. I would first note that this argument would have considerably more traction had the Saginaw ABC actually challenged the market recovery and job targeting programs at the trial court level. However, counsel for the Saginaw ABC made it clear that it was making no such challenge:
Mr. Masud:
Judge, ABC, and I will make very clear on this, because there's some other counter-claims that ABC needs to be concerned about.
We are not challenging the lawfulness of market recovery. . . .
We don't need to show that that process is illegal. In fact, we state in our brief that it is not -- job targeting is not illegal. . . .
I will make it very clear for this record that ABC is not in any way, shape, or form challenging employers and Union's right to do these things.
Secondly, I note that the record is barren of any suggestion that the Saginaw ABC engaged in any effort through administrative proceedings to have the CIS consider these "side agreements" in establishing prevailing wages. As the defendants/intervenors point out, the doctrine of exhaustion of administrative remedies is well-settled in Michigan and requires a party to exhaust whatever administrative remedies are available before challenging an agency action in court. There are a number of very good reasons for the doctrine:
(1) an untimely resort to the courts may result in delay and disruption of an otherwise cohesive administrative scheme; (2) judicial review is best made upon a full factual record developed before the agency; (3) resolution of the issues may require the accumulated technical competence of the agency or may have been entrusted by the Legislature to the agency's discretion; and (4) a successful agency settlement of the dispute may render a judicial resolution unnecessary.
It is certainly possible, as the Saginaw ABC asserts, that unions and unionized contractors are colluding to conceal the e
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