UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

X

UNITED STATES OF AMERICA, Plaintiff,

90 Civ. 5722
(CSH)

-against-

DISTRICT COUNCIL OF NEW YORK

CITY AND VICINITY OF THE UNITED : BROTHERHOOD OF CARPENTERS AND : JOINERS OF AMERICA, et al.,

Defendants.

X

DECLARATIONS IN OPPOSITION

O'DWYER & BERNSTIEN, LLP
Attorneys for Defendants
52 Duane Street, 5th Floor
New York, New York 10007
(212) 571-7100

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

X

UNITED STATES OF AMERICA, Plaintiff,

Defendant.

X

DECLARATION OF PETER THOMASSEN, PRESIDENT,
DISTRICT COUNCIL FOR NEW YORK CITY AND VICINITY,
UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF
AMERICA

PETER THOMASSEN, pursuant to the provisions of 28 U.S.C. § 1746, declares as follows:

1.   I am the president of the District Council of New York City and Vicinity, United Brotherhood of Carpenters and Joiners of America and the only individually named respondent in the Government's motion for an order finding me and the District Council in civil contempt and declaring the request system violative of the Consent Decree. I submit this declaration in opposition to the Government's motion.

2.    The Government clearly does not understand and has, as a result, misrepresented to the Court, the events of the June 2001 contract negotiations between the District Council and its major signatory contractor associations. The Government would have the court believe the District Council entered those negotiations with the desire and design to liberalize the "request system", as it had come to be known, but nothing could be further from the truth. In fact, the District Council's negotiating committee, all experienced carpenters and present or former business agents of managers, leveraged our initial proposal to eliminate contractors' existing right to request any carpenter from our out of work list ("OWL"), after recognizing it was going to be an unachieved demand, to gain a 25.75% wage increase over the term of the 2001-2006 contract and many other contract language enhancements for our membership, in exchange for what we believed – and continue to believe – was an inconsequential technical change in the request rule.

3.    The request system has been in existence as a term of various collective bargaining agreements between the District Council and its signatory contractors since before the Consent Decree was entered in 1994. The contracts attached to the Government's moving papers as Exhibits 23 and 24 are examples of such contracts dating from 1993. It is respectfully

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submitted that the drafters of the Consent Decree acknowledged this origin of the request system and left its future existence to the collective bargaining parties.

Background and the 2001 Negotiations

4.    As this honorable Court is well aware, your declarant was elected to the office of President of the District Council in December 1999 and took office in January 2000, along with the two other popularly elected new executive officers (the Executive Secretary Treasurer and the Vice-President) and Delegate Council representatives following the first elections conducted under the restructured District Council. We were the first administration elected to govern the District Council following the end of the supervision by the United Brotherhood of Carpenters and Joiners of America ("UBC"), our International body and the term of the Independent Review Office ("IRO") under the Consent Decree.

5.    Pursuant to our then newly approved By-Laws, Section B, our Executive Committee serves as the Council's collective bargaining committee for conducting negotiations with employers. The Executive Committee is authorized to appoint additional negotiating committee members. As President, I am the presiding officer at all meetings of the

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Council and a member of the Executive Committee. A copy of our By-Laws, approved by this Court in July 1999, is annexed hereto as Exhibit A.

6.    Our new administrations first major round of negotiations took place in June 2001. The contracts, with the major employer associations representing our signatory contractors and our independent signatory contractors engaged in general outside carpentry work, were scheduled to expire on June 30, 2001. In advance of our negotiations, the Executive Committee appointed the business managers of each of our constituent local unions to a part of the negotiating committee. We were, therefore, a committee of approximately twenty (20) members.

7.    Prior to commencing negotiations, the negotiating committee discussed the wishes of our membership and goals we would seek to achieve. Among the goals and objectives we developed through this process were several contract language changes to enhance job security and of course, our desire for significant wage and benefit improvements. Regarding the request system in particular, Local 608 business manager, John Greany shared with us the result of a questionnaire conducted of that membership wherein his membership expressed their desire to eliminate requests. The Government's reference to this in formation from Brother Greany and his description of how that information was used by the

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Committee is set forth in the Government's brief at p.10-11 and in its corrected Exhibit 19. As Brother Greany described in his deposition before James Wasserman, Esq.:

Q: After [tabulating the answers to your questionnaire] what was the next step? You presented that to [Michael] Forde or you presented it to the companies?

A: To the committee, our Negotiating Committee. We discussed it.

******

Q: When you told the committee about how your membership felt on the request issue, what did the committee do? Did they then formulate that into a proposal?

A: Everybody discussed it and we put a proposal up...to the Contracting Association... and we negotiated... apprentice ratios and wage hikes and it was all just intertwined.

Government's corrected Exhibit, p.82-83

8.   Brother Greany's description of this process and treatment of the request system during the 2001 negotiations is essentially correct. As a result of the committee's proposal discussions and the Local 608 questionnaire, I drafted an initial set of Union demands for presentation to

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the Association representatives on June 7, 2001. Among these demands, number 13, stated:

Carpenters will be hired by the job referral list at the District Council. The 50/50 rule will be enforced and no special requests can be made to the union. The contractor can hire whom he wants on his 50% ratios.

(Emphasis added) A copy of my initial proposal sheet is annexed hereto as Exhibit B.

9.    I can recall that the contractors' opposition to this proposal was loud and definite. The contractors resisted any effort to limit their right to request particular workers from the OWL beyond the six (6) month limitation contained in the existing agreements. In addition, the contractors repeated their often made complaint that they were not receiving qualified, productive carpenters from the OWL and needed to be able to hire whom they wanted in order to remain competitive with a growing non-Union segment of our industry.

10.  Negotiations on all of our proposals progressed throughout the month of June. At all times it was the negotiating committee's objective to limit "special requests" and to increase job opportunities for our membership.

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11.   I annotated our initial proposals after our June 7, 2001 negotiating session. A copy of my record of the status of the negotiations as of that date is annexed as Exhibit C. As indicated there, in the context of our discussions on all of our demands, the Union's proposal concerning the request system had become modified to limit an employer's right to request only workers from the local area where the job was being performed. In response to contractor complaints about the quality and productivity of workers from the OWL, we began to discuss the concept of certifying workers' competency in basic carpentry skills. At the same time, the parties were still not agreed on economic terms concerning wage increases, certain classification pay increases and other matters.

12.  A final agreement was reached with the major associations on June 28, 2001. A copy of the Letter of Agreement between the District Council and the Association of Wall and Ceiling Contractors for the contract, commencing July 1, 2001 is annexed hereto as Exhibit D. See also, Government Exhibit 26. As this final agreement indicates, agreement was reached on a wage increase for all members (25.75% over the 5 year term); classification pay increases for foremen and general foremen ($3.00 and $6.00 per hour over journeymen rates); the 35 hour work week and many other issues of importance for the benefit of our members.

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13.  With regard to the request system, we believed we had achieved a significant restriction of the system as it had existed under the prior agreements. Under our new agreement, contractors could no longer request workers who were not members of our District Council and all out of town carpenters on a job would have to be matched with a District Council member who could not be requested. We believed these changes would enhance job opportunities for our members and was responsive to their wishes. The Government's position, at page 10 of its memorandum of law in support of its motion, that we were acting against or contrary to the wishes of our membership is baseless and could not be further from the truth.

14.  At the time, the omission of the six month prior employment rule seemed inconsequential, as our collective experience suggested to us that employers, intent on keeping productive, efficient workers they were familiar with, would continue to request workers who had worked for them in the past. I believed then and continue to believe, we gave the contractors the proverbial "ice in the winter" in exchange for important concessions in the context of those negotiations.

15.  In addition, I understand that a study conducted by the District Council's staff in connection with this motion, out of more than 4,500

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requests reviewed from 2004, over 85% of the workers requested worked for that employer within the six months prior to the request. And with respect to the 10% or so of workers who did not work for the contractor within the previous six months, it cannot be said they would not have been on the job site anyway. They just would not have been considered a "lawful request" from our OWL and would have to be considered a "company" worker for the purpose of the 50-50 rule in our contracts. Even under the six month rule approved in the Consent Decree and in effect for over a decade, employers were able to staff job sites with workers of their choice if they paid attention to the process. As I said before, the omission of the six month rule was "ice in the winter", whereas the restrictions on requesting we achieved in those negotiations benefited members of our District Council.

16.  The District Council's commitment in June 2001 to restricting employer requests is further evidenced by our treatment of this issue with our independent contractors, in which contracts the right to request was eliminated.

17.  Section 17 of our By-Laws provides that our Delegate body has the authority to consider and finally approve the contracts negotiated by our Executive Committee, at its July 11, 2001 meeting, our Executive-Secretary Treasurer, Michael Forde, Vice-President Eugene Maiello and I reported to

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the Delegate body on the results of the concluded negotiations. Copies of the new language changes were handed out and reviewed so the delegates could share the information with their respective members. Following discussion, all of the officers' reports were approved and the contracts were thereby ratified. A copy of the minutes of the July 11, 2001, General Delegates Meeting are attached hereto as Exhibit D.

18.  I am upset and distressed our committee, and me in particular, are being maligned by the Government for achieving these objectives. At its core, our request system proposal in 2001 was the same as the Government's today. As the only District Council representative to testify against the Government's motion to extend the term of Walter Mack as the Independent Investigator, I am constrained to conclude the Government has singled me out to send a message to other Union officials not to speak out in opposition to their positions on matters of importance to our organization.

Changing Times and Approaches To the Request System

19.  As reflected in our 2001 negotiations and in our report to the Delegate body in July 2001, a recurring position told to us by our signatory contractors, then and since, is that they, like employers in all industries, need to hire and retain the most productive, skilled and efficient workers they can.

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This is particularly so in our industry where we are faced with increasing competition from the non-union contractors and their labor force.

20.  The competition with the non-union sector has increased dramatically in the wake of the construction downturn we have experienced since the tragedy of 9-11. This construction recession is reflected in the number of hours of fringe benefit contributions made to our Benefits Funds. As a trustee of the New York City District Council of Carpenters Benefits Funds I am kept informed of this information as compiled by the Segal Company, our Fund consultants. Total reported hours worked by participating Union carpenters declined from 21.6 million hours in 2001 to 16.8 million hours in 2003 and 16.9 million hours in 2004.

21.  The competition from the non-union contractors and labor force was also made known to construction industry representatives in attendance at the 2004 meeting of the Building and Construction Trades Department of the AFL-CIO, which I attended. Presented to us at that time and submitted herewith as Exhibit E, was a video message from Edward Malloy, President of the New York City Building Construction Trades Association and Lou Colletti, President of the Building Trades Employers Association, describing and elaborating on the effects of Union job rules and the economic pressures on contractors and developers to build non-union. That presentation vividly

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described the challenges facing the unionized construction sector from nonunion competition. I urge the Court to view this presentation and appreciate the impact it has made on us.

22.  Those of us involved in the construction industry in New York City are all too aware of the gains made by our non-union competition into projects never believed possible in this town. We are seeing multi-story new construction and rehabilitation work being built by non-Union contractors with non-Union labor that we never believed possible in this town. Yet, we know that our members and signatory contractors can build these projects better, safer and more profitably than the non-Union competition.

23.  In order to fight this trend, representatives on both sides of the labor-management table must take steps to change the way business has been done until today.

24.  In this regard, our international body, the UBC, strongly endorses the policy of "full mobility" pursuant to which every union member should be free to work for any signatory contractor willing to hire and retain them. A carpenter's skills and productivity should earn his/her employability. Through better training of apprentices and journey level carpenters, we should be able to convince developers and contractors the best way to build is to build Union.

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25.  Looking into the near future here in New York City, our District Council is also exploring plans on how to appropriately certify workers in basic work skills competence to address our contractors' concerns about the quality of unknown workers being dispatched from our OWL. This process will undoubtedly require the participation and cooperation of our contractors, with which the details of such a program will have to be negotiated at the bargaining table. This will also require the cooperation and approval of the Government, or the Court should the Government object, since such a program will entail adding new skills to the existing list of skills a carpenter can list in their individual portfolios.

26.  The District Council (and I, personally and as president) take our reporting obligations under the Consent Decree seriously. Our attorneys have probably communicated with the Government dozens of times regarding job referral rule matters since this administration took office in 2000, concerning such matters as adding new shop steward and journey level skills and dividing our jurisdiction into additional referral lists to make the job referral process more friendly for our members. I have personally

attended a meeting with our attorney at the United States Attorney's office to discuss our desire to add various job skills and to subdivide our jurisdictions for our Dockbuilders' and Millwrights' locals, and attorneys

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from the United States Attorney's office have been invited to the District Council's OWL offices to personally observe and discuss the dispatch system and its rules and procedures of operation. We have, in short, strived to maintain an open and cooperative relationship with the Government and to respect its proper role under the Consent Decree.

27.  The challenge to our Union and to me, as a District Council officer, is to balance the interests of our membership as a whole in retaining our current work and winning future work, while trying to ensure regular employment for as many carpenters as possible. These are difficult and at times conflicting goals, because full mobility and skill certification could result in some carpenters having less steady employment. Should we lose our fight against our non-Union competition, however, I will not have a membership for which to preserve any employment opportunities.

28.  Simply eliminating the request system at this time for all carpenters and all contractors, however, as the Government urges, is a short sited proposal posing potentially devastating effects on our membership. It exposes the Government's lack of sophistication in labor relations matters affecting our industry. The District Council shares the Government's concern about contractors who cheat or cause our workers to work at below scale wages or for no benefits, but we strongly disagree that eliminating the

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request system for all contractors — and the thousands of good, productive, hard working Union carpenters who benefit from it — is the answer to this problem. We must remember that every carpenter working on a Union job is also a member of this organization, to every one of which we also owe a duty to represent and to secure their jobs.

29.  Better contract enforcement and auditing programs, as well as law enforcement, are the better approach to deal with bad contractors. In this regard, as the Court is aware, the District Council has embraced the appointment and retention of an independent investigator and has dedicated the resources necessary for the work of that office.

30.  What is certain, in our view, is that simple answers to these complex issues must be explored and resolved in the first instance between the industries' representatives, not by the government. This is our duty as elected representatives of our membership, and it is our membership who will tell us in this December's election, if we are balancing these interests appropriately.

31.   For all of these reasons, it is respectfully submitted the Government's motion should be denied in all respects.

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I declare the foregoing to be true under penalty of perjury.

Dated: New York, New York
October , 2005

Peter Thomassen

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

X

UNITED STATES OF AMERICA,

Plaintiff,

90 Civ. 5722 -against-   (CSH)

DISTRICT COUNCIL OF NEW YORK CITY   DECLARATION AND VICINITY OF THE UNITED

BROTHERHOOD OF CARPENTERS AND

JOINERS OF AMERICA et. al.

Defendant.

X

Maria Sabater declares pursuant to 28 U.S.C. Section 174

1. I have been employed by the District Council for New York City and Vicinity, United Brotherhood of Carpenters and Joiners of America, as an Executive Assistant since 2000. Prior to that I was employed by Dockbuilders Local Union 1456, UBC, as its Office Manager beginning in 1995. In these capacities, I have been trained and am familiar with the UBC's ULTRA data system which is used, among other things, as the database for the Out-of-Work List system.

2. At the request of the District Council attorney's, I was assigned to determine how many contractors had submitted requests for a particular carpenter in 2004. To do this, I reviewed a report produced by our OWL office showing all contractor requests from January 1, 2004 through December 31, 2004. There

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were over 11,000 requests during 2004. In the time allotted for my work, I was able to review and analyze 4550 of them. Attached hereto as Exhibit " G" is a sample of the OWL printout I reviewed.

3. My analysis of this list indicates that 226 contractors were responsible for the 4550 requests I reviewed. Attached hereto as Exhibit "H" is a copy of a list illustrating that analysis.

4. The District Council has approximately 2000 signatory contractors. I declare the foregoing to be true under penalty of perjury.

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

X

X

Gary Rothman, declares pursuant to 28 U.S.C. Section 1746:

1.    I am an attorney with the law firm of O'Dwyer and Bernstien, LLP and

am fully familiar with the facts in this case.

2.    Attached to the respondents' Exhibit Supplement as Exhibit "K" is a true

copy of a letter I sent to Assistant United States Attorney Edward Scarvalone, dated

September 22, 2005. I have never received a response to this letter.

I declare the foregoing to be true under penalty of perjury.

Dated: New York, New York October 17, 2005

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

X

UNITED STATES OF AMERICA,

Plaintiff,   DECLARATION

-Against-

90 Civ. 5722 (CSH) DISTRICT COUNCIL OF NEW YORK CITY

AND VICINITY OF THE UNITED

BROTHERHOOD OF CARPENTERS AND

JOINERS OF AMERICA et. al.

Defendant.

X

FRANCIS X. McARDLE, pursuant to the provisions of 28 U.S.C. §1746, declares as follows:

My name is Francis X McArdle. I have been the Managing Director of the General Contractors Association of New York, Inc. since 1985. The General Contractors Association of New York represents the heavy construction industry active in New York City. The Association has 110 contractor members. We sign fourteen different collective bargaining agreements with the heavy construction trades in New York City, including four separate agreements with the New York City District Council of Carpenters.

I have been asked to address the question of personnel selection and choice by the heavy construction industry in New York City. The heavy construction industry in New York City makes most of its profits and does most of its work for public owners (the Port Authority, New York State DoT, and the MTA) on the basis of open competitive bidding, in which the lowest price bid generally gets the work.

Of all the factors that go into the development of a bid, the key element in determining the contractor's bid price is the expectation of labor productivity under the circumstances of the job. The contractor has to evaluate the work to be done and the time allowed for the performance of the work, both on a daily basis and within the over-all time allotted for project execution. This evaluation allows the contractor to price the cost of the work and the profit expected on the basis of labor productivity expectations. A firm's data base on labor productivity, its past experience and its future expectations, are the key to its profitability in the long term. If the labor productivity is overestimated, there will be little, if any, profit. Often bad estimates of labor productivity mean absolute losses on the job.

Getting work done in the construction industry is a function of team work and team building. There is almost no work done in the construction industry by one person alone. Contractors work hard to develop teams. They expend substantial time and effort to develop their field leadership as team builders, from the foremen to the job superintendents. They work on developing a field workforce that is both able to execute the tasks that are required and to work in a team environment. There are often bonus opportunities available for teams that exceed production or safety expectations. The human resources, not the fancy equipment, are the key to any contractor's success or failure.

The Association has spent a considerable amount of its time in its collective bargaining over many decades on issues of labor force selection. The Association's contractor members would like to be completely free of any impediments that restrict the ability to find and employ their work force, while being at the same time committed to the values and purposes of union construction in New York City. The Association has successfully resisted the voluntary establishment of mandatory hiring halls because the contractor members believe that anything that limits their ability to select and develop their own work force will affect labor productivity, the ability to become the low bidder, and the ability to do the job profitably The Association has only one mandated hiring hall, imposed by court order after a union lost a discrimination case two decades ago. The Association does not have hiring halls with any other trade.

The conflict over labor force selection has been particularly sharp with the District Council of Carpenters in our agreement that covers the employment of Carpenters. The contractor members of the Association bid all over the City of New York, a circumstance that can give rise to a conflict with the geographically-based structure of the Carpenters. The contractor would like to be able to bring its established work force to any job site in the City and hire whomever is needed additionally from whatever source; the District Council has demanded that all of the workforce be drawn from those out of work .The compromise reached across the bargaining table has allowed the contractor and the District Council, to share on a one-for-one basis.

But sharing is not sufficient. Contractors always need a specific skill set for the job at hand. Contractors do not bid work unless they believe that they have the labor or can get the labor that can execute the work. They never price work on the assumption that they can just hire a group of workers and 'put on a play'. The lowest responsible bidder will have evaluated the work and the labor productivity of its workforce. It won't just have `made it up'. So the arrangement for sharing must allow the bidding contractors to forecast production. If the contractors can't do that, they are gambling, not bidding.

The rules for selecting additional workers or for satisfying the geographic local requirement are critical to contractors. They need the ability to find people that can fit into the team, both with the skills and the ability to team. The contractor should never be asked to take on an unknown, with unknown job skills and unknown teaming abilities. They do not want to be burdened with someone who can't do the work required and/or work in a team. If they get such a person, they will just send them back. They will keep sending people back until they get what they need. To do otherwise is to cost them productivity and profit. Carrying someone who can't do the work or work in a team becomes apparent to all and punishes the team to which the individual is assigned. The team will throw them out if management doesn't, particularly in the many circumstances where there are bonus opportunities based on safety and productivity.

The current agreement, won at the table in the context of the over all financial and conditions settlement that was reached, provides that the contractor may request people to meet the District Council's 50% manpower off the out-of-work list by name, provided that they are from the local that geographically covers the work site. This provision, now under challenge by some, allows the contractor to expand its work force with people whose skill set and team building skills are known. It reduces the number of people that are 'tried out and sent back'. It cuts the contractor's costs of work force acquisition and the time and production lost on a job when someone who is referred cannot meet the expectations of the job.

Some have argued that the ability to request by name is somehow the basis for corruption. It has been argued that it allows contractors to get a workforce more willing to take less than the collective bargaining agreement calls for in wages. For the contractors who are members of the GCA this is furthest from the truth. They know that all public work is subject the prevailing wage requirements and enforcement. Contractors have no risk-free incentive to either cheat or to connive with the work force on wages and benefits. The enforcement penalties and provisions of the public agencies, with the ultimate threat of the loss of the opportunity to work for the public sector, put a cheating contractor at great risk.

If anything, the ability to obtain the skills that are needed by request-by-name reduces that opportunity for corrupt bargaining that would exist if there was any rigid impediment to putting together the workforce that is needed for the job at hand. The Association believes that the existing agreement with the District Council of Carpenters is an agreement that meets partially the needs of each party; it is a compromise that gets each party some of what they want in a way that allows each party to be successful on a level playing field.

The Association believes that the current structure, struck across the bargaining table, is one that should not be subject to judicial challenge as either inappropriate or a corrupt bargain. The agreement means that no one can be forced to take on an unknown. It reflects the desire of every organization to build the team that's needed to do the work at hand. It creates the basis on which both the contractors and the District Council can work together.

I declare the foregoing to be true, under penalty of perjury.

Dated:   New York, New York October ??, 2005

Francis X. McArdle