Philadelphia Construction Unions Terrorize Builders, Workers
When it comes to intimidation in the pursuit of economic interest, organized labor long has been a master of the art. Such behavior is especially noxious and costly among construction unions. This past Monday through Wednesday, February 11-13, National Review Online published three articles under the title "Goon City" - here, here and here - on how Philadelphia's construction unions are imposing their brand of justice on open-shop contractors, workers and project sites. Assault, threats, harassment, vandalism, and arson are simply ways of doing business. Union bosses and their lawyers rationalize this behavior. Victims usually don't publicly complain about it. And the city council has every incentive to wink at it. The three-part series brings home with force the reality that union violence, in Philadelphia and elsewhere, is hardly "a thing of the past."
Understand this: Unions, in whatever industry, function as cartels. Their goal is to raise the price of labor as much as possible without pricing members out of a job. By nature, a labor union's leaders and members have an incentive to exclude non-members from competing for the same range of jobs, whether those non-members belong to a rival union (or worse) no union at all. Restriction of entry is central. A union sees "outside" workers as natural enemies because they are willing to do the same work for lower wages and benefits. The union will turn its wrath against an employer when he is known to hire persons outside the union. The union will try to use every tactic it can get away with in order to convince the employer not to hire lower-cost labor. And if the employer fears extra-legal retaliation by the union, he is likely to accede to the union's demands and pass on the higher labor costs to customers. From a societal point of view, this is an inefficient arrangement. But from the employer's point of view, it makes sense. He wants to finish his project and stay in business.
Intimidating those who facilitate the undercutting of wages and benefits is especially prevalent in the construction industry. The building process is time-sensitive and proceeds by overlapping sequences. One broken link in that process can delay and possibly shelve an entire project. Unexpected surprises can include bad weather, supplier price hikes, a recession or failure to secure emergency financing. Unions know this. And they know that in a heavily unionized city, a strike or slowdown can be the ultimate tool to sabotage a project. Unions already enjoy any number of government-granted monopoly privileges, most crucially, exclusive representation and forced dues collections. With a license to use physical force or threats of force, they can control the show.
What many people might not know is that, up to point, unions long have operated with such a license. Back in 1932, Congress passed and President Hoover signed the Norris-LaGuardia Act, which has made it very difficult for an employer to obtain an injunction against union organizers from trespassing on or adjacent to the employer's property. And in 1973, the Supreme Court, in U.S. v. Enmons, upholding a lower court decision, ruled 5-4 that union officials are exempt from sanctions of an interstate commerce anti-extortion law known as the Hobbs Act, as long as their coercion furthers "legitimate union objectives." In that particular case, three members of a Louisiana affiliate of the International Brotherhood of Electrical Workers had been indicted for firing gunshots at utility company transformers and blowing up a transformer substation during a strike. Law has consequences. In the mid-Eighties, the President's Commission on Organized Crime noted that mob-controlled unions could justify "violent acts against a non-union business competitor...[as] a legitimate, non-prosecutable labor objective such as a union organizing effort, when the actual purpose was to eliminate unwanted business competition for the syndicate."
Since a union's ostensibly noble ends can be used to justify its means, many developers and contractors reluctantly pay inflated labor costs - a union tax, if one will - rather than see their projects jeopardized. Jillian Kay Melchior, a fellow at the Alexandria, Va.-based nonprofit Franklin Center for Government and Public Integrity, came across plenty of cases of union intimidation in researching her articles for National Review Online. Many victims, fearing retaliation, declined to be indentified. And there is no shortage of victims. According to the National Right to Work Committee, 143 reported incidents of union violence in the city of Philadelphia occurred during 1975-2009. Incidents have included attempted murder, firebombing, tire-slashing, and armed threats. What's more, concludes Melchior, for every crime reported, there are at least 10 that aren't. And the offenses aren't dead letter office material. Contractors, developers and even labor officials admit that union aggression has increased substantially within the last five years. Here are a few examples:
#1 - An operating engineer at a downtown open-shop construction site was brutally beaten by a cluster of union thugs who had gathered outside a chain link fence and stone wall (see photo). Union "protestors" charged him, slammed him up against the fence, and pummeled him until he passed out. Fortunately, the victim's wife caught the attack on camera and a cop happened to be near the site. "It was terrifying," said the engineer, who asked to remain anonymous for fear of further violence. "I was concerned that if they pushed a little harder, my head would be crushed. Even after I was on the ground the Civil Affairs cop came up. Who knows what they would have done if he hadn't been there?" The arrested union goons, Ryan Stewart and Philip Garraty, each got off with a $200.50 fine and 18 hours of community service. It helped to have a slick lawyer in Joel Trigiani, who also represents the Laborers District Council of Philadelphia. He successfully petitioned for his clients to participate in an Accelerated Misdemeanor Program. In Philadelphia, at least, assault and battery is a misdemeanor, not a felony, if a union member commits it.
#2 - In the summer of 2011, a fire of mysterious origin spread inside a downtown Philadelphia music venue under construction, MilkBoy, just weeks before its scheduled opening. Maybe it wasn't a mystery after all. Members of United Brotherhood of Carpenters and Joiners recently had been picketing the owners' other establishment in the suburb of Ardmore, Pa., employing increasingly abusive tactics. Although owners Jamie Lokoff and Tommy Joyner had used union labor on the new project, the Carpenters were furious that they weren't included. Lokoff and Joyner proceeded with the project and suffered the consequences. That the fire didn't do much damage owed to the fact that it began on concrete rather than wood. The owners contacted police and gave relevant details, but no arrests to date have been made. "We physically don't have any proof that it's a union," says Lokoff, "but of course it's what we believe...And I think the unions feed off any media. Even if it's negative, it's a win for them. They won. They got their message out that you should hire union workers."
#3 - Brothers Michael and Matthew Pestronk, owners of the Post Brothers contracting firm, have suffered months of harassment, vandalism and violence at the hands of union "protestors" at an environmentally-friendly high-rise residential complex they are building downtown. Union activists, mostly unemployed construction workers, insisted that the Pestronks use only union labor. But such a course of action, noted the brothers, would add about $15 million to the total cost. Even nonunion workers cost from $35 to $45 an hour in wages and benefits. "We just have the money we have, and that's it," said Michael Pestronk. "We can't pay $2 for something that really only costs $1...The project just wouldn't have happened." Building trades unions were determined to make sure they could afford it. So far, they've attacked workers with crowbars; punched a security guard in the face; vandalized construction equipment; scattered nails and dumped oil in front of site entrances; laid down bottles of urine near the building; slashed tires; and distributed a doctored photo of Matthew Pestronk's wife featuring male genitalia and the slogan, "Carrie Pestronk likes to get it hard with it." The unions, however, picked the wrong pair of people to bully in the form of the Pestronk brothers. Matthew Pestronk declared his intent to launch "the most nasty, multifaceted legal defense that anyone has ever done." He remarked: "They just picked a fight with the wrong people. They wanted to make an example of us because we're in our thirties, and we're doing major projects; there's a whole generation of people our age who are doing smaller projects, so they thought they'd teach us a lesson."
There are plenty of similar recent outrages. While one wishes the Pestronks and like-minded developers and contractors the best in their resistance, they have an uphill battle. The Pestronks already have spent a combined $1 million on lawyers and an expensive security system with 24/7 video surveillance. There are at least a few major obstacles to reform.
First, as mentioned earlier, unions enjoy an implicit grant of federal privilege. While the Norris-LaGuardia Act, the Enmons decision and other union protections don't preclude punishment of union crime, they do raise the bar of evidence needed to convict. And while Enmons pertained to the applicability of the Hobbs Act, the logic of that ruling conceivably could be applied to any number of laws. For if a given law allows a union to forcibly suppress interstate commerce if its goals are "legitimate" (e.g., higher wages), other laws also might grant such authority.
Second, union officials protect their own. For them, the viability of their institutions carries more weight than protection of the safety of non-members. Many leaders have become millionaires, thanks to fat salaries and benefit packages. They're not about to throw it all away by admitting they are complicit in rackets. Typically, they spin examples of union violence by trivializing them or by assuming false moral equivalence. Pat Gillespie, longtime business manager of the Greater Philadelphia Building Trades Council, provides a classic rationalization. Labor tensions, he told Melchior, are "not anywhere near as high as they could be. You have folks coming in and trying to bottom-feed the industry, trying to destroy the standards and quality of life that we've established. You can't let that happen without at least speaking up about it, and that's what we've been doing." But in fact that's not what his union affiliates have been doing. Assault, vandalism and harassment are not about courageously "speaking up"; they're about preventing others from speaking. "One person's harassment is another person's free-speech exercise," continues Gillespie. "Life is tough in Philadelphia, as it is in any urban area." As for the Pestronk case, he says the union siege at the project site "doesn't amount to anything more than pushing and shoving matches." Tell that to the Pestronks.
Third, city government in Philadelphia encourages union violence and cover-ups. Members of the Philadelphia City Council informally exercise what is known as "councilmanic privilege," which gives each member effective veto power on land use projects within his district regardless of the impact of the decision on the builder or the community. In practice, this means that if a developer or contractor doesn't submit to a union's hiring demands, he's at their mercy. In 2011 alone, reported the Philly Post, unions donated about $327,600 to City Council members. The report, moreover, was "not meant to be exhaustive, but rather a snapshot of contributions from the groups that far and away provide some of the heftiest donations to the Council each year." There's nothing like a bought politician.
Union violence flourishes because those in positions of authority give it tacit encouragement. Statutes, regulations and court opinions are helpful to the cause of reform, but unions also know how to make them work to their own advantage. Investigative journalism may be the ultimate tool for reform. Thanks to Jillian Kay Melchior, organized labor is facing some unwanted public attention on its culture of intimidation in Philadelphia - and hopefully beyond city limits as well.