Are you trapped in your labor agreements?

My previous company before I was bought out struggled with not only a changing client base but also a changing labor base. As all the plants continued to leave New York State and the Buffalo Area, the ones left started to change the rules for bidding on projects.

We saw this in the general contracting area and the specialty contractors. One contractor who did only flat work decided that it was time to liquidate his company and concentrate on his property rental portfolio.

A couple of GC with aging owners decided to set up their children with a new non-union company to get out of the union contracts. The father would then lend or sell his equipment at fire sale prices to get them set up and use his contacts to get them work.

The three big G.C.’s in the area liquidated due to lack of work. There was only two companies that decided to withdraw from the unions and keep their current operating structure. One was Sevenson out of Niagara Falls NY and my firm.

This process started six months before the union contracts were up, requiring us to give them notice. It made it real difficult for work we had in Erie county since that was the area the union covered.

Because we had expanded our operating area from just Erie and Niagara County to all of New York State we had jobs we could continue to operate and generate cash flow for the company. When we gave them notice we had three things happen.

The first was our houses and company were immediately picketed. We had a 15 foot inflatable rat inflated in front of our business and flyers passed out around our homes with a rat on them and targeting us.

The second was the department of Labor (New York) immediately came in and did a full audit on our labor records, happily nothing was found. The third was we had NLRB lawsuits filed against us. 

I will talk about these issues in the future since they provided me with an eye opening experience. We happily survived the ordeal but not without a lot of angst and belt tightening.

The system is not set up to allow you to easily exit union contracts. Next week I will explore the issues we dealt with

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