By Adam Pagnucco.
Last month, I broke the story that UNITE HERE Local 25, which represents hotel, restaurant and casino employees in the D.C. region, had launched a boycott of the Montgomery County Conference Center. The center is owned by the county government but operated by Marriott, which has an adjacent hotel. Several county council members have expressed support for the union and many state legislators have promised to respect the boycott. Now another shoe has dropped: a bill at the county council.
Bill 22-25, lead sponsored by Council Members Natali Fani-Gonzalez, Kate Stewart and Sidney Katz, would mandate labor peace agreements (LPAs) at hotel developments in which the county government has economic participation. The Cornell University School of Industrial and Labor Relations (my alma mater!) defines an LPA as “a contract between an employer and a union, in which the employer agrees to be neutral during a union organizing campaign and not interfere with union organizing. The union agrees not to engage in picketing, work stoppages, boycotts, and any other economic interference with the employer.” Additionally, the bill has language that an applicable LPA “contains, at a minimum, a provision prohibiting the labor organization and its members from engaging in any picketing, work stoppage, boycott, or other economic interference with the employer’s operations in which the County has a proprietary interest, for the duration of that interest.”
LPAs are not full collective bargaining agreements. They do not set wages, benefits and working conditions. Nor do they directly establish union representation. Their purpose is to ensure employer neutrality during union organizing campaigns. The decision of whether to select union representation is then made by employees who are free from management campaigns urging them not to unionize.
The county has required LPAs before. In the wake of strikes by private trash hauler employees a decade ago, the county council passed Bill 6-18, which mandated that contractors with solid waste, recycling or yard waste contracts of at least $250,000 sign LPAs if the county’s procurement director and chief administrative officer found it to be in the county’s best interest. The county had good reason to want an end to trash strikes and that bill was seen as the answer.
The interesting wrinkle in the new bill is how it defines county “economic participation” in a “hotel development project.” Here’s the definition:
Economic participation means the participation of the County in a hotel development project through a lease, loan, financing, tax increment financing, underwriting, or guarantee.
That raises two questions.
First, does this cover loans granted by the county through its Economic Development Fund (EDF)? Many EDF incentives, which are used to attract and retain employers, are loans that convert into grants if recipients meet certain conditions like job creation requirements. The term “financing” in the above language is particularly broad. However, there is a limitation elsewhere in the bill that the LPA’s anti-work stoppage requirement applies only as long as “the duration of that interest” by the county.
Second, the bill explicitly includes “tax increment financing” as economic participation by the county. Tax increment financing (TIF) districts typically last for decades and one has been proposed by the county executive for the Viva White Oak project. If a hotel is built under the White Oak TIF, it would be required to have an LPA by this language. Did anyone tell the developer about this before dropping the bill? How will the developer react? How would prospective hotel tenants react?
This bill sets off an interesting discussion involving the executive branch (which appears to be working on the conference center labor dispute behind the scenes), Marriott, the union, and perhaps the Viva White Oak developer as well. We shall see how it all turns out in the end.