N.J. Supreme Court restores bistate agency’s ability to issue certain union agreements

The case centered around construction of the Scudder Falls Bridge just north of Trenton. (Courtesy of the Delaware River Joint Toll Bridge Commission)

A bi-state commission that maintains toll bridges spanning the Delaware River can issue project labor agreements, and that authority is not curtailed by bidding laws in New Jersey and Pennsylvania , New Jersey’s Supreme Court ruled Thursday .

The decision reverses an appellate court ruling that found the Delaware River Joint Toll Bridge Commission, a bi-state agency responsible for the construction and maintenance of Delaware River bridges north of Philadelphia, had its ability to issue project labor agreements constrained by Pennsylvania law.

The justices found the bi-state compact authorizing the commission allows it to issue project labor agreements — a type of collective bargaining agreement that allows unions to negotiate terms before any workers are hired — despite such agreements not existing when the states entered into the compact 90 years ago.

“The Compact does not expressly grant the Commission the power to open bank accounts, purchase smart phones, allow staff to work remotely during a pandemic, or install lawn sprinklers, but the Commission’s authority to borrow money, enter into contracts, appoint employees and fix their compensation, and make improvements to real property clearly embrace those actions,” Justice Rachel Wainer Apter wrote for the court, adding, “So too with PLAs.”

The dispute at the heart of the case involves the new Scudder Falls Bridge, which spans the Delaware River just north of Trenton and was completed in 2022 .

The high court took the case despite the bridge’s completeness because it believed conflict over a bi-state agency’s authority to issue project labor agreements was likely to recur. New Jersey’s attorney general , in filings, said an appeals court ruling that found the commission could not issue such agreements had created confusion at the state’s nine other interstate agencies.

The project labor agreement for the Scudder Falls Bridge required that at least 75% of contractors and subcontractors be hired from a list of more than 30 local unions that did not include the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Services Workers International Union.

George Harms Construction had a collective bargaining agreement with the United Steel union and asked the commission to amend the project labor agreement to allow the union’s members to work on the bridge.

The commission sued the company after it warned it would seek an injunction against the agreement , and the firm countered by charging the agreement ran afoul of competitive bidding laws by excluding the United Steel union’s members.

A trial court rejected the company’s claims, finding New Jersey’s bidding laws do not apply to the bi-state commission because it could not be unilaterally subjected to the laws of one of its members states. The court rejected the company’s claims of favoritism for lack of evidence.

The new bridge was complete by the time an appellate panel ruled on Harms’ appeal , and that three-judge panel found the commission lacked the authority to issue a project labor agreement in the first place because Pennsylvania and New Jersey laws on such agreements are dissimilar.

The Supreme Court ruled otherwise, saying the Appellate Division erred when it turned to examine state law to weigh the extent of the commission’s authority.

“When two states confer a power on a bi-state entity within the four corners of an interstate compact, there is no basis to look beyond the compact, to other state laws of general applicability that do not mention the compact at all, to determine whether that power exists,” Wainer Apter wrote.

The agency celebrated the ruling, saying it affirmed the broad powers granted to it by its 1934 compact and nudged the long-running case closer to a resolution after eight years of litigation.

“The commission serves a critical public function, and today’s decision appropriately recognizes that the two states entrusted the Commission with the broad discretion necessary to fulfill its bi-state transportation mission,” said Joe Donnelly, a spokesperson for the commission.

An attorney for George Harms Construction did not chafe at Thursday’s decision, noting his clients never asked the Appellate Division to rule that interstate agencies could not issue project labor agreements.

The firm sought to bar the commission from issuing a project labor agreement that required hiring from a specific pool of workers, and Thursday’s order will require a lower court to decide that issue.

“The issue raised by Harms on appeal is that, if a Project Labor Agreement is used, it is unlawful to exclude a qualified source of labor.  The illegality of a PLA that excludes a qualified source of labor has now been remanded to the trial court for adjudication — and we are confident we will prevail on this issue,” said the attorney, Francis Cook.

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