Preparing for the Impacts of the OE 324 Lockout

At 12:00 AM on June 1, 2018, the Collective Bargaining Agreement (CBA) between the International Union of Operating Engineers, Local 324 (OE) and the Michigan Infrastructure & Transportation Association (MITA), commonly referred to within the industry as the OE Road Agreement, expired.

Although the industry (MITA) has made several attempts to initiate negotiations with the OE, the union has refused to meet and has since initiated a strike against a MITA member contractor, among other related circumstances. Therefore, a lockout of all OE 324 employees will be initiated effective Tuesday, September 4, 2018, at 7:00 AM.

This lockout of the OE 324 employees does not mean that all projects must be shut down immediately. Work by and with the other trades, as well as with non-union operating engineers, can continue on projects until such time that you determine that constructive progress can no longer be made with the labor involved.

However, if you are forced to shut down a project (MDOT let project or local agency let project under the MDOT Standard Specifications), MITA suggests that you initiate a project shutdown by requesting that the Engineer suspend the work on the project due to the ongoing OE 324 labor dispute in accordance with subsection 104.07 of the MDOT 2012 Standard Specifications for Construction (MDOT 2012 Std. Specifications).

For the purpose of preserving your rights and in preparation for a project shutdown, MITA recommends that each prime contractor submit to their Engineer a Notice of Intent to File Claim for a time extension and additional compensation that may be associated with this shutdown. This notice of intent should be filed in accordance with subsection 104.10 of the MDOT 2012 Std. Specifications.

The MDOT 2012 Std. Specifications, subsection 108.08.C.6 identifies “labor disputes” as an excusable delay without liquidated damages for opening to traffic and completing within the contract time. Per subsection 108.08.C, MITA would anticipate an extension of time will be granted on projects impacted by this delay, with the extension of time being the duration of the delay to the controlling operation. Noting the reference to “delay to the controlling operation”, we highly recommend that all contractors submit to their Engineer just prior to a project shutdown an updated progress schedule or critical path that clearly and accurately identifies the controlling operation.

As the MDOT Std. Specifications don’t specifically include “labor disputes” as a “compensable delay” in subsection 108.09.B, you should not anticipate that you will receive additional compensation for costs incurred during or related to the shutdown. MITA’s suggestion on the inclusion of “additional compensation” in the notice of intent letter is solely for the purpose of preserving your right to claim additional compensation for costs incurred during the shutdown.

Click here for a sample Request to Suspend Work and Notice of Intent to File Claim Letter

MITA recommends that all subcontractors and suppliers file a like Notice of Intent to File Claim with their “contractor”. A notice of intent to claim from a subcontractor or supplier to their contractor completes the notice documentation chain and protects claim rights at all levels.

Click here for a sample Sub/Supplier Notice of Intent to File Claim Letter

Prior to a project shutdown, MITA also recommends that all contractors initiate a meeting with their Engineer to develop a “shutdown preparedness plan”. A shutdown preparedness plan should address and/or include, but not necessarily be limited to, the following:

· Motorist and overall jobsite safety during the shutdown.

· Temporary traffic control configuration/set-up to be implemented and maintained during the shutdown.

· Materials and equipment storage locations during the shutdown (as necessary).

· Identification of completed work with photograph/video documentation (with date and time stamp) of entire jobsite after it has been prepared for the shutdown. Request the Engineer to accompany you when making this project documentation.

· Submit to the Engineer a detailed listing of the equipment and labor on the project, your planned schedule of use for that equipment and labor, and your plan for the equipment and labor during the shutdown. Request your Engineer to sign and approve this submittal.

· Discuss and come to consensus with the Engineer on their anticipated level of monitoring and maintenance of the jobsite during the shutdown. Specifically discuss the frequency of monitoring and the contractor staff involved.

· Specifically identify a “Contractor to Engineer” communication protocol that will be executed to inform the Engineer that the shutdown is over and to discuss and agree to a return to work plan.

MITA will continue to keep all members informed of any developments in this OE 324 matter.

If you have any questions, please contact Mike Nystrom, Executive Vice President/Secretary, at, or Glenn Bukoski, Vice President of Engineering Services, at They can both be reached at the MITA office by calling 517-347-8336.