Jottings By An Employer's Lawyer

Monday, November 15, 2004

Pittsburgh Requirement for Union Agreement Not Preempted

A builder of a hotel approached the city of Pittsburgh seeking TIF (tax increment financing). The city responded, but tied to the funding a requirement that the hotel operator enter into a collective bargaining agreement. After some fits and starts, and faced with a loss of funding the operator entered into a Neutrality Agreement, which preserved its funding. After a card check failed, the union requested a second, and then filed for arbitration when the hotel operator refused. The company filed suit challenging the underlying validity of the Neutrality Agreement on the ground that it was pre-empted by the National Labor Relations Act. After surveying the fairly well marked contours of the law, the court found under these circumstances, the city was acting not as a regulator, but as a market participant. so that the Agreement was not pre-empted. HERE, Local #57 v. Sage Hospitality Resources, LLC (3rd Cir. 11/15/04) [pdf]. One way of looking at the result was that it was nothing more than the hotel operator had bargained for, but more importantly it reflects a way to use local political force to advance organized labor's interest. Some might argue that organized labor would be better served spending their time convincing workers of the merits of being represented, rather than seeking political power to utilize in top-down organizing. Regardless of the merits of that argument, at least in some circumstances, the use of local political strength remains a legal, and shown here, viable option.

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