Operating Engineers Filing Grievances on the MITA Road Agreement Subcontracting Clause Industry Wide

This week the Operating Engineers, Local 324 (OE) began issuing grievances across the industry to signatory contractors who have subcontracted work to non-signatory companies (which in most cases means non-union companies). The basis for the grievance is exactly the same in every single case. The OE is asserting that the Subcontracting Clause in Article IX of the MITA/OE Road Agreement somehow requires that every signatory contractor who uses a non-signatory subcontractor is responsible to either pay fringes on all hours of work covered under this agreement by the non-signatory contractor or to force the non-signatory contractor to pay into the OE fringe benefit funds directly for all hours worked (which would require every non-union subcontractor to become union or sign a participation agreement). MITA, with the guidance of our experienced labor counsel, vehemently disagrees.

This issue first arose two years ago and a letter and memorandum were issued to address the OE position. To better understand the situation, please click here to read the original letter and memorandum.

At this point, MITA and the OE have agreed to bypass the grievance hearing and go directly to the arbitration process, which is clearly defined in the MITA/OE Road Collective Bargaining Agreement. Ultimately, this is the quickest way to clearly address the difference in interpretation with regard to this highly sensitive issue. Fortunately or unfortunately, depending on the outcome of the arbitrator decision, the arbitration process in the MITA/OE Road Agreement is binding, thus rendering a final decision that cannot be fought out further in the courts by MITA and the OE.

A negative outcome could have a dramatically crippling impact on the OVERALL industry and how work is competitively bid in Michigan, so MITA will work very closely with legal counsel to defend the long-standing industry interpretation of this collective bargaining agreement.

If you receive a grievance or have any questions, please feel free to give Mike Nystrom, Executive Vice President, a call at 517-896-1493 or email him at mikenystrom@mi-ita.com.