On this date in 1996, the Supreme Court decided Tormee Construction, Inc. v. Mercer Cty. Improvement Auth. That day saw the Court’s decision issued, nine days after the case was argued orally before the Court. But the Court’s full written opinion by Justice Pollock, for a five-Justice majority, with a dissent by Justice Handler in which Chief Justice Wilentz joined, did not come out until February 6, 1996. 143 N.J. 143 (1996).
Defendant (“MCIA”) solicited bids for several construction projects involving branches of the Mercer County Library. One of the bid specifications required contractors to enter into a “Project Labor Agreement” (“PLA”) with “Appropriate Labor Organizations.” The definition of “Appropriate Labor Organizations” was “an organization representing journeymen in one or more crafts or trades listed in N.J.A.C. 12:60-3.2, for purposes of collective bargaining” that also met certain other enumerated criteria. This required the use of union labor, and the majority found that “only two unions could qualify: the AFL-CIO and the Building Trades Council.”
Non-union construction firms, as well as anon-union worker and a citizen taxpayer of Mercer County sued to declare the PLA invalid and to restrain the MCIA from receiving bids under it. The Law Division dismissed the case, finding the PLA valid. The Appellate Division denied plaintiffs’ request for a stay, as did the Supreme Court, but the Supreme Court granted direct certification.
The majority of the Court held the PLA invalid. “PLAs can contravene the goals of competitive bidding. By mandating that workers belong to certain limited unions, PLAs restrict bidders to contractors with relationships to those unions. The obvious effect of such a restriction is to lessen competition. Additionally, PLAs can increase labor costs by ecluding or reducing the number of employable non-union workers.” All that, as well as concern about avoiding “favoritism, improvidence, extravagance and corruption …. and any potential for contract manipulation,” led to the conclusion that the PLA violated the policy of the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -49.
Not long before, in George Harms Construction Co. v. New Jersey Turnpike Auth., 137 N.J. 8 (1994), the Court had invalidated “the designation of a particular labor organization as the sole source of labor for a public-construction project.” The majority found no material difference between that case and this one, where workers were limited to only two unions. The Court distinguished a New York case in which, among other things, the PLA specifically recognized that the successful bidder need not be a union contractor …. [and] expressly prohibited discrimination against prospective employees on the basis of union membership.”