us v district council transcript of conf before judge berman 2-27-2013

7/29/2019 Us v District Council Transcript of Conf Before Judge Berman 2-27-2013

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1 UNITED STATES DISTRICT COURT

1 SOUTHERN DISTRICT OF NEW YORK

2 ------------------------------x

2

3 UNITED STATES OF AMERICA,

4

4 Plaintiff,

5

5 v. 90 Civ. 5722 (RMB)

6

6 DISTRICT COUNCIL OF NEW YORK

7 CITY and VICINITY OF THE

7 UNITED BROTHERHOOD OF

8 CARPENTERS and JOINERS OF

8 AMERICA, et al.,

9

9 Defendants.

10 ------------------------------x

11 New York, N.Y.11 February 27, 2013

12 9:20 a.m.

12

13 Before:

14

15 HON. RICHARD M. BERMAN,

15

16 District Judge

16

17 APPEARANCES

17

18

18 PREET BHARARA

19 United States Attorney for the

19 Southern District of New York

20 BY: BENJAMIN H. TORRANCE

20 Assistant United States Attorney

21

21 FITZMAURICE & WALSH, LLP

22 BY: DENNIS WALSH

22 Review Officer

23 - and -

23 MINTZ LEVIN

24 Attorneys for Review Officer

24 BY: BRIDGET ROHDE

25

SOUTHERN DISTRICT REPORTERS, P.C.(212) 805-0300


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1 APPEARANCES CONTINUED

2 DECARLO, CONNOR & SHANLEY

2 Attorneys for New York City District Council of Carpenters

3 BY: JAMES MURPHY

3

4 McELROY, DEUTSCH, MULVANEY & CARPENTER

4 Attorneys for Wall Ceiling Association

5 BY: MARK A. ROSEN

5

6 HOLLAND & KNIGHT

6 Attorneys for Building Contractors Association

7 BY: LOREN L. FORREST JR.

7

8 KAUFF McGUIRE & MARGOLIS LLP

8 Attorneys for District Council Fringe Benefit Funds

9 BY: RAYMOND G. McGUIRE

9

10 LAURA KALICK, Fringe Benefit Funds Interim Executive Director

1011 KWAME PATTERSON, District Council Director of Communications

11

12 JULIE BLOCK, Carpenter Funds Chief Compliance Officer

12

13 STANDARD DATA CORPORATION

13 BY: ANTHONY ANDRETTA

14

14

15

16

17

18

19

20

21

22

23

24

25

SOUTHERN DISTRICT REPORTERS, P.C.

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1 (In open court)

2 THE COURT: Let me just say a word or two about the

3 technology. We have had some back and forth over the last

4 couple of days, and I didn't really give you -- there was no

5 opportunity to explain what my thinking was.

6 It strikes me that with respect to the implementation

7 of this new collective bargaining agreement, what you all are

8 proposing is a companion technology that goes towards

9 implementation. And I think that's pretty much up to you. In

10 some respects it strikes me as a little bit of a tail wagging

11 the dog. The dog is the collective bargaining agreement.

12 What's new about it? We have been talking for quite some time

13 about collective bargaining agreements.

14 I remember Mr. Conboy saying last year that they were

15 imminent -- I think over a year ago there were going to be a

16 whole series that didn't happen. I don't think there's been a

17 whole lot of discussion about why it didn't happen or when it

18 is going to happen, but I'm frankly more interested in the

19 collective bargaining agreement itself, the new one, and20 somewhat of a discussion about the change to rule of full

21 mobility than I am in what particular technology you all are

22 going to employ in connection with that agreement.

23 And it strikes men as to the latter -- and I'm happy

24 to hear the proposal and see it as well to some extent, but in

25 terms of the feasibility of any particular technology, that's


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1 pretty much up to you all, as long as it works, whether you use

2 iPhones or Samsung or whatever, that's really your call. The

3 issue is -- and that I think you're only going to know over a

4 period of time how well this new technology helps implement the

5 collective bargaining agreement. So that's where I'm coming

6 from.

7 I also want to hear about the funds. I haven't heard

8 a presentation in quite some time about how the funds are

9 doing. That's really another meat and potatoes issue, as well

10 as the collective bargaining agreement.

11 One thing that we never talked in depth about is what

12 premise return on investment those funds use as a benchmark or

13 as an estimate from year to year, whether those are realistic

14 or not, and whether in fact those returns are being made. So

15 I'm interested in that and certainly also interested in

16 hearing -- and you're, I take it, going to describe web site as

17 well as another topic.

18 So that I hope offers you some background or some

19 explanation of why I start of tamped down the technology20 presentation. But with that, I'm happy to begin. I think we

21 have allocated 10, 15 minutes for each of the major topics. If

22 I missed any, I'm sure you'll mention it.

23 MR. MURPHY: James M. Murphy for the New York City

24 District Council of Carpenters.

25 If I may, just preliminarily, your Honor, there are


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1 two items that were presented to you at the last status

2 conference. I just wanted to give you an update on those

3 items.

4 The first one had to do with the MWA matter and

5 Arbitrator Townley, as you may recall. She has now issued,

6 back on January 22nd of this year, her remedy award. And she

7 limited the -- followed some of our direction, I think, and

8 limited the remedy to $8 million down from the $59 million that

9 the MWA employer association was claiming.

10 Since then, the district council has been in

11 negotiations with MWA about paying the remedy amount, as well

12 as we have preliminarily negotiated a successor ten-year

13 collective bargaining agreement that both sides are at least

14 satisfactory with. It provides for reopeners with interest

15 arbitration and other matters, so giving back a little bit.

16 THE COURT: When you say "giving back," what is the

17 doable proposition, if any, with respect to that?

18 MR. MURPHY: Yes, your Honor, we were looking at,

19 given her a liability award that was issued last May of a claim20 by the employer association, MWA, of $59 million in retroactive

21 damages, and the arbitrator insisted that we brief the issue of

22 remedy. We did so, and she then limited the remedy to going

23 back to just a certain amount of time as well as completely

24 deciding that she did not have the jurisdiction to address the

25 issue of the benefit fund. So that the damages remedy is


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1 limited to $8 million retro to 30 days prior to the filing of

2 the grievance, which was back in July of 2011, rather than

3 retroactivity to August 1st of 2009.

4 THE COURT: And so you mentioned you're negotiating

5 that still?

6 MR. MURPHY: We have tentatively agreed to a new

7 ten-year contract, a successor agreement, to replace the one

8 that expires by its terms this June 30th. We have agreed to

9 other matters that would also include the district council

10 paying the remedy that's been awarded by Arbitrator Townley,

11 which is $8 million.

12 There are issues, and maybe Mr. McGuire can speak to

13 the funds involved in litigation in front of Judge Batts and in

14 front of Judge Stanton with the MWA, and the MWA is -- I think

15 the funds in the union are looking for some sort of global

16 settlement of all these disputes.

17 The other one is the retirees' lawsuit that's pending

18 in front of Judge Oetken, and the retirees have filed a partial

19 motion for summary judgment. We will be filing our own motion20 for summary judgment, as will as the funds, scheduled to be

21 filed next Friday. The retirees are looking -- as you may now,

22 there was a system in place since 1982 called the blue card

23 system in which union dues pursuant to check off authorization

24 cards were deducted from the vacation amounts that were

25 distributed to employees from the vacation fund. They were


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1 distributed on a quarterly basis.

2 That system has been put -- we put an end to that

3 system. The district council, since the early last summer, has

4 been collecting its dues directly, and we're negotiating in

5 collective bargaining agreements, including the one with Wall

6 Ceiling, standard dues check off authorization procedures so

7 that the dues amounts would be deducted from employees' wages

8 and remitted to the district council on a regular basis; just

9 the way the funds contributions are.

10 One of the legacy issues that the blue card lawsuit

11 highlighted was that for all the time that the blue card system

12 was in effect, the union never paid any administrative expenses

13 to the vacation fund, which then was merged into essentially

14 the individual account plan into the district council's welfare

15 fund. So the district council has it's outside accountant do

16 an audit report and study, and they determined over the last

17 six years -- the statute of limitations -- that the amount of

18 administrative fees with interest came to slightly more than

19 $1.7 million.20 The district council a few weeks ago, through the

21 executive committee and the delegate body, approved the payment

22 of those administrative expenses with interest. So that is a

23 non-issue any more, that that problem within that lawsuit has

24 been cured, as we see it. And we think, and I believe the

25 funds believe that the motions for summary judgment will be


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1 successful and that that lawsuit will go away.

2 THE COURT: Did you say with respect to the other

3 lawsuits that are pending that there is an effort to resolve

4 them all globally?

5 MR. MURPHY: The other lawsuits were brought by the

6 district council benefits funds against various MWA employees

7 for delinquent contribution. And I think Mr. McGuire can speak

8 to that. But I think that the funds as well as the union as

9 well as the MWA and its member employers are looking for some

10 sort of global settlement, especially to have the stability of

11 a new ten-year collective bargaining agreement to help that

12 troubled industry.

13 If you want, we can go into the full mobility. The

14 first contract that was negotiated with the largest

15 multiemployer association, which is the Wall Ceiling

16 Association, they want it, and they got and paid for full

17 mobility, which I hope that I explained adequately in my

18 December -- sorry, February 13th letter to the Court.

19 THE COURT: I'm pretty sure I understand the idea.20 What I don't understand is a little bit of the history of

21 what's happened. There were several agreements pending, as I

22 said before, over a year ago, and Judge Conboy was describing

23 them and saying they're imminent to be approved, and I guess

24 they were not approved. Right?

25 MR. MURPHY: Only one was approved, it's with a


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1 smaller association that does the sidewalk bridges, does the

2 elevators on construction sites, safety netting, that sort of

3 thing. That was approved. But all the other contracts were

4 rejected by the rank and file.

5 When a deal was reached on August 22nd of 2012 with

6 Wall Ceiling, that deal, along with compliance piece of it,

7 which was an addendum that we provided a copy to the Court, was

8 ratified by the union's executive committee, and that same

9 night, August 22nd, 2012, was ratified by the delegate body.

10 And it provides full mobility, but it also provides for what we

11 think is a multifaceted compliance program that the district

12 council, in conjunction with its own inspector general, in

13 conjunction with the government, in conjunction with the Review

14 Officer Walsh, have been put into place.

15 And a lot of the delay since late August has been

16 trying to put those pieces together, get the right hardware,

17 get the right software, do the training. And we believe now

18 that we would be prepared, with the Court's permission, because

19 what this will involve the Court modifying an order from 200920 on the hiring procedures, to be able to go live with this, have

21 full mobility as well as have the compliance and electronic

22 data --

23 THE COURT: That's the part I didn't quite understand,

24 and still don't exactly understand. So obviously the big

25 change relates to the substantive issue of full mobility,


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1 right?

2 MR. MURPHY: Right.

3 THE COURT: So this is a contract that will changes

4 existing procedure, practice, and in fact orders of the Court

5 with regard to that. Correct?

6 MR. MURPHY: Correct.

7 THE COURT: So that's really, as I say, the meat and

8 potatoes here. The technology is a way that you're going to

9 help implement that system, but that doesn't go to exactly the

10 merits of the full mobility. So just is explain a little bit

11 more about the issue of full mobility. I guess it's clearly

12 one that employers were bargaining for and seeking, and for

13 which now there is a collective bargaining agreement that

14 adopts that principle, is that right?

15 MR. MURPHY: That's correct, your Honor.

16 THE COURT: Is that what the hold up has been, so to

17 speak, in reaching agreement, or are there other issues as well

18 that had to be overcome?

19 MR. MURPHY: The issues that really had be overcome20 were the compliance issues, because there was the fear. I

21 think to its credit on the part of the association, Wall

22 Ceiling as well as the district council's leadership, the

23 review officer, the government, and the district council

24 inspector general, that with full mobility, that is, the

25 employer being able to select all of its work force except for


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1 the certified shop steward, who is assigned from the

2 out-of-work list, that the prospect or the possibility or the

3 opening for corruption, like in the bad old days, was there.

4 So there was a really concerted and almost

5 overwhelming effort to put into place a multifaceted compliance

6 procedure of which the daily reporting by the shop steward, and

7 then reporting those hours to the employer on a daily basis so

8 the employer can check it daily, as well as the employer, has a

9 week after the close of the payroll week to contest anything

10 that's been reported by the shop steward. Also rank and file

11 members would be able to go on and check any job that they have

12 been on, which shows -- will allow them not only to see

13 themselves and their own hours, but see the other people

14 working, the other carpenters working on job and their hours,

15 so the members themselves are part of the whole watchdog

16 component of this.

17 Plus there are initiatives by the inspector general's

18 office to hire retired carpenters to go out and do spot checks

19 obviously on the big jobs, but especially on jobs where there20 won't be shop stewards assigned, one- and two-person jobs, to

21 make sure they're in compliance under the collective bargaining

22 agreement, because that's a new thing under the collective

23 bargaining agreement, and to make sure there is not other

24 untoward things happening in relationship to the hiring and how

25 people are being paid and how hours are being recorded.


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1 THE COURT: Isn't it fair to say, though, in terms of

2 the efficacy of the implementation, you all are not going to

3 know with certainty until after a certain period of time when

4 the system is in place, in play and working, whether it is

5 effective, isn't that right?

6 MR. MURPHY: That's correct, your Honor.

7 THE COURT: You haven't done it yet.

8 MR. MURPHY: We have done it. There's been a trial

9 that's gone on for several months now involving six

10 contractors. All reports are that the system does work.

11 Obviously when we roll out a much larger basis, we presume

12 there will be some problems.

13 Part of our back-up system that we have is we're going

14 to have people at the district counsel available through a

15 toll-free number that will be distributed so if someone doesn't

16 have it, or even an employer themselves can call in the hours.

17 That will be available seven days a week, so it's even able to

18 pick up Saturday and Sunday and holiday jobs. So we're putting

19 together this comprehensive program. As it rolled out, I think20 we'll see what additional programs there are, but so far the

21 electronic reporting component of it appears, from all reports,

22 to be working.

23 THE COURT: When you say -- and I read your

24 materials -- your test run, explain that. Is that a real or is

25 that a test, as it were?


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1 MR. MURPHY: It was actual live of having the shop

2 stewards out in the field, as I understand, report the hours

3 in, and then conveying those hours to the employer, to the

4 foreman, to the time keeping people, to make sure that

5 everybody is on the same page. But one of the things that

6 we're concerned about is whether or not they would be able to

7 do this communication out in the field.

8 THE COURT: OK.

9 MR. MURPHY: If you want, Mr. Andretta from Standard

10 Data is here.

11 THE COURT: Before we get to that, I would still like

12 to know a little bit more about the status of the other

13 contracts and where they are in the scheme of negotiation.

14 There were four or five all together?

15 MR. MURPHY: Yes. There's a tentative agreement, the

16 details of which have been posted on the district council's web

17 site, with the building contractors association, which is a

18 large association with some overlap of membership with Wall

19 Ceiling. But there's a number of fairly large general20 contractors that are members of the building contractors

21 association. They would provide, as I understand it, for the

22 same full mobility. Instead of being a contract -- it would

23 only be a three-year contract, because they have issues I think

24 internally, that association, between the smaller members and

25 their larger general contractor members. They're ongoing


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1 negotiations. My office is not involved with them. They

2 negotiate without counsel with the general contractor's

3 association, including dock building, heavy highway

4 construction, and the like.

5 I understand they're fairly close do reaching an

6 agreement. We are, to be honest, at loggerheads with the

7 cement league over a lot of what provisions have been agreed

8 to, but there is not an impasse but there's a spirited

9 disagreement on the issue of market recovery rates with them.

10 And given all these negotiations, the negotiations for the

11 floor covers association has been on hold, and we have not met

12 with them except, I understand, informal contacts with them for

13 a number of months now.

14 THE COURT: Does that mean, with respect to the --

15 other than the Wall Ceiling contract, relations continue under

16 the existing -- whatever the existing agreement until such time

17 as there is a subsequent agreement?

18 MR. MURPHY: Yes, most of those agreements expired by

19 their terms on June 30, 2011. And there's been a series of20 continuation agreements where the money contributions are made

21 into the funds and everything is held in place as negotiations

22 continue. So there's been no disruptions of work or anything

23 like that.

24 THE COURT: So why don't you just spend a minute on

25 the issue of full mobility, what it was, for the record, and


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1 what it is now in this proposed agreement.

2 MR. MURPHY: Well, what it was under the Court's 2009

3 order is that at least 33 percent of the hires for a job had to

4 come from the district council's out-of-work list, stated

5 clearly. Now with this change, no one will have to come from

6 the out-of-work list except for the certified shop steward, and

7 that's on obvious anti-corruption effort that the union is

8 insisting upon, and the association didn't have a problem with

9 that.

10 THE COURT: And the 33 percent was a negotiated figure

11 as opposed to 40 percent or 60 percent or some other number?

12 MR. MURPHY: It was, as I understand -- it was before

13 my time -- it was semi negotiated, and it was imposed by Judge

14 Haight in his order of May 26, I believe it was, 2009.

15 THE COURT: How did he know to pick 33 percent versus

16 some other percent? It must have been a recommendation.

17 MR. MURPHY: There were negotiations and new contracts

18 entered into in the early 2000s without, as at least as I read

19 the record, the knowledge or the approval of the government,20 and so the government brought a contempt proceeding because it

21 believed -- as it turned out from the Second Circuit, it was

22 correct -- that it was a violation of consent decree. Judge

23 Haight disagreed, the government appealed to the Second

24 Circuit, the Second Circuit agreed with the government, and it

25 was remanded back to Judge Haight, and he issued a final order


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1 in 2009 of judgment of contempt.

2 THE COURT: Which includes now the 33 percent?

3 MR. TORRANCE: Yes, your Honor, Ben Torrance for the

4 government. It was a litigated matter. As I recall it, Judge

5 Haight essentially reached a compromise as his contempt remedy

6 exercising the equitable power of court instead of 50/50 or

7 100 percent, he came to 67 percent.

8 THE COURT: OK. So now explain -- if you could

9 introduce the technology, what it's designed to do, and how it

10 relates, so to speak, with full mobility.

11 MR. MURPHY: What's it's designed to do is to provide

12 the union and the funds and the employer with daily feedback as

13 to who was on the job in a way far more accurate than the more

14 traditional paper shop steward reports which were done on a

15 weekly basis, and historically were, I guess to be charitable,

16 very problematic. And this is a method of what we think is a

17 more foolproof method to make sure that the time and the hours

18 and the pay and the contributions are based upon what job

19 classifications people are working in and the hours they're on20 and under what the collective bargaining agreement and then

21 reported to the funds. So the funds have up-to-date

22 information as to what is owed in contributions, and the

23 employer is has up-to-date information. And rather than

24 waiting possibly many weeks or months or years to reconcile

25 accounts and wait for a fund audit of an employer -- not that


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1 those are going to go away -- but to provide all parties

2 concerned with much more accurate as well as speedy

3 information. And so if there's need for reconciliation, it

4 could be done very quickly.

5 THE COURT: What would be theoretically some of the

6 abuses -- where could the corruption come in if, for example,

7 you didn't have accurate records as to who is working and how

8 long they're working at a particular job site?

9 MR. MURPHY: The possibilities of corruption would

10 include the shop steward reporting people and hours and the

11 contractor disputing it saying that not all those people were

12 there. And because some of them were -- I don't know, there's

13 some arrangement with somebody to pay them in cash, for

14 instance, so they're not supposed to appear. If there's an

15 issue with the shop steward being involved in a system like

16 that, then we think that eventually, with the other compliance

17 efforts and members themselves being able to look on or some

18 members saying: Wait a minute, there are ten people on this

19 job and they're only reporting five, what's going on here? I20 have been working on that job the last week. They can call the

21 review officer or the inspector general's hot line and they can

22 send people out. We will have roving groups of retiree

23 carpenters working for the inspector general. The inspector

24 general has his own crew that does spot checks and surveillance

25 of jobs, et cetera. So it's a multifaceted effort.


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1 And I think one of the key things is the ability of

2 rank and file members to actually look at the jobs they were

3 on. They try to go on and they find that they can't get on,

4 see anything on a job they were on, they know there is

5 something going on, that their hours aren't being reported or

6 aren't being reported accurately or they're not even being

7 reported, they just disappeared. Likewise, if somebody is on a

8 job and they know all the ten people on the job and they go on

9 the system and see that there's 20 people on the job, then you

10 may have a system where people who are being ghosted on the job

11 in order to get benefits even though they're not actually

12 working.

13 THE COURT: So are those some of the abuses, who is

14 working or who isn't working, as to whether or not there are

15 adequate deductions for benefits down the road or whether

16 people are getting benefits who in fact don't deserve to get

17 them?

18 MR. MURPHY: All of those, your Honor.

19 THE COURT: And who is being selected to work in the20 first place, is that --

21 MR. MURPHY: Who would be selected to work in the

22 first place would be up to the contractor. The contractor --

23 under the new system, the contractor is going to be able to

24 choose everyone who is going to work for them on a job except

25 for the shop steward.


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1 THE COURT: Whereas before you could choose 66 percent

2 roughly of the work force, now he gets to choose a 100 percent.

3 MR. MURPHY: That's correct.

4 MR. TORRANCE: May I add a little context?

5 THE COURT: Sure.

6 MR. TORRANCE: One of the reasons that this is a

7 corruption issue, one of the historical patterns that we

8 observed was a corrupt contractor wanting to seek to cut his

9 costs, wanted to pay them cash, not pay benefits. What they

10 often did was, with the union leadership, would agree to turn a

11 blind eye to that, so there's a probably an exchange of cash

12 there. Sometimes that arrangement was facilitated by La Cosa

13 Nostra. So part of that -- all of that goes into the

14 historical pattern of corruption that we observed as part of

15 our RICO case. So workers were working off the books working

16 for cash, the contractor benefits by cutting its cost, the

17 corrupt union leadership would get some kind of compensation.

18 THE COURT: Kickback.

19 MR. TORRANCE: Kickback. And the funds were20 defrauded.

21 THE COURT: Is that the central abuse that you

22 observed historically?

23 MR. TORRANCE: I would say in the time that I have

24 been on the case, in the time since roughly 2000 -- since the

25 ownership of Mr. Conboy ended, that in my experience has been


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1 the primary type of abuse, yes. There are historical examples

2 before that of different types, but in recent years.

3 THE COURT: OK, thanks.

4 Now Mr. Murphy, we were -- now you want to demonstrate

5 how it is and what technology you intend to put in place, which

6 we had some trial runs on, to ensure transparency is really

7 what this is all about, as to who is working on what jobs for

8 what time period.

9 MR. MURPHY: That's correct, your Honor. So what

10 Mr. Andretta can do is show you what a shop steward would be

11 seeing and entering, what a rank and file member could then

12 check to see what they would be entering, and what the employer

13 will be seeing and have reported to them so they can also

14 check.

15 THE COURT: And then you will also briefly describe,

16 as you have in your materials, in the event of dispute or

17 disagreement as to what mechanism is in place through

18 arbitration or whatever to resolve.

19 MR. MURPHY: Yes.20 MR. ANDRETTA: I won't go through the flow because

21 Mr. Murphy sort of explained how the flow works. So the shop

22 steward will go into a web-enabled site through the tablet that

23 he's issued by the district council.

24 THE COURT: So he'll have the tablet on the job.

25 MR. ANDRETTA: Correct. And he's responsible for that


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1 tablet.

2 So he puts in his UBC ID and password, and what he

3 gets is a list of all the job sites that he is working on.

4 As you can see here, you can see the ones -- most of

5 them have been already submitted, the one on 13th is an open

6 one. So what we have done is we will take all the hours that

7 were worked yesterday by let's say ten men, and we'll bring

8 them over -- in this case, three men, we'll bring them over to

9 today.

10 Now if he has to remove some because they left the job

11 site, he can remove them by checking the box on the left-hand

12 side. You could see where he could enter the new hours. He

13 said in this case yesterday, Mr. White worked eight hours, he

14 was the foreman, Mr. Herman worked eight hours, he was the shop

15 steward, and yesterday Henderson who was on the job may have

16 been out that day, he may have been out sick. So yesterday

17 there were three men on this job and they worked a total of 16

18 hours.

19 So he could either reset these hours to zero if he20 wanted to reenter them, or just go in and make the changes to

21 these hours, and if he needs to add a new man, he can put in

22 the UBC, another man comes in the job new, he puts in the UBC

23 number, and if we find that man on the membership system that

24 we currently maintain, it will bring that person in and he

25 could actually put the ten hours in for that person.


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1 He does the same, and you will see that Joe Ono was

2 added to the report with ten hours. But again, Mr. Henderson

3 didn't show up today, so he did not pay his hours. So a total

4 of four men working 26 hours today.

5 He will hit click to submit this report. Once he

6 submits that report, an e-mail is sent to the representative

7 identified as the contractor. We maintain all these email

8 tables provided to us by the contractors and by district

9 council, because there's also email lists we'll get into as we

10 get into the member portal for the business agents, the

11 business managers, the IG's office and review office. So we'll

12 get to that.

13 So someone at the contractor now who has been assigned

14 to handle this receives an email. In that email is a link.

15 All they do is click that link, and it brings them up to enter

16 their contractor ID and, again, password.

17 What that person sees then is the reports that have

18 been submitted by the shop steward for that particular

19 employer. Now in this case you'll see there's multiple job20 sites for this employer. So this employer is going to -- he

21 sees all these jobs have been submitted by the shop steward.

22 If you notice on the right-hand side, the contractor has not

23 reported on these yet, so it's up to the contractor now to get

24 from February 10 through February 17 and check all these hours

25 and either -- he can either approve them, he calls the first


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1 one up he sees her, he could either approve it or dispute it.

2 He has to be sure he wants to dispute this report. If he does,

3 it will open up the screen again and it gives him the ability

4 to enter the contractor's hours that they worked for that

5 particular day.

6 THE COURT: So he does a parallel -- the contractor

7 has a parallel process or person who also monitors the job site

8 and determines whether the hours put down by the shop steward

9 were correct and whether the individuals that the shop steward

10 says were on the job were in fact on the job?

11 MR. ANDRETTA: Correct.

12 THE COURT: Would that be something common, they would

13 disagree who was there and who worked?

14 MR. ANDRETTA: Typically what would happen in most

15 cases is somebody left early and the shop steward didn't know

16 about it, so he put in eight hours. If you notice, on the

17 first one, White, the shop steward put in eight hours, but when

18 the contractor came in he said six, and you will notice the

19 reason code he gave is one, which is he left work early due to20 illness. Because why should -- the contractor is not going to

21 want to pay eight hours in terms of benefits if the man only

22 worked six hours.

23 So that information is entered, then it's updated.

24 And you will notice again we have four men on the job for the

25 day, shop steward entered a total of 26 hours. The contractor


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1 entered 24 hours. Once the contractor hits "return," that's a

2 disputed report, that goes on an email distribution list, it

3 goes back to the shop steward. Whether it's approved or not it

4 goes back to the shop steward, it goes to the district council,

5 and from there they start to resolve the dispute resolution,

6 and that's something that we're not a part of. So we just do

7 the notifications.

8 THE COURT: I hear you. So could the shop steward

9 resolve the dispute himself if he talks to the employer and

10 says oh, yeah, I didn't realize somebody left for two hours

11 earlier yesterday, you were right, and so does he do that or

12 does the district council do the reconciliation?

13 MR. MURPHY: Our anticipation is there would be a

14 discussion with one of the staff representatives with the shop

15 steward saying there's a dispute, what happened? Did the

16 person really leave? And if you want to check, the individual

17 rank and file worker could call the staff rep and say yeah, I

18 did leave early, I was sick or had to leave early for a child.

19 So we're looking at things could be worked out informally,20 which is the way that most grievances are worked out, but we

21 could talk later about if that doesn't happen.

22 THE COURT: OK.

23 MR. ANDRETTA: There are different levels as well. At

24 the end of one week we produce a report that shows the

25 differential in hours for each day during that week and total


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1 them up. And then there is -- it's in the compliance document

2 that we were provided where there's a level one through level

3 three, less than 25 hours it goes through a distribution list

4 here. I'm sure you're familiar with that. So again it's all

5 about email distribution.

6 If there's a difference in the number of men, the

7 actual head count, that goes directly to level three, which is

8 the highest level. Then he's asked if he wants to approve the

9 report, and the report goes through.

10 The watchdog. This is what Mr. Murphy was referring

11 to as now the member. The member will have access from his

12 home, wherever he has internet access, he can put in his UBC ID

13 and password. That typically will be the same password for the

14 district council web site. In this case I will show you what

15 the IG's office can see. The IG's office --

16 THE COURT: Go back to the member for the moment. So

17 the member would be able to -- he might be concerned that the

18 number of hours that he actually worked were not reflected in

19 somebody's report, and so that would impact his compensation20 and his benefits, et cetera, et cetera. So he has access to

21 this information.

22 MR. ANDRETTA: He has access only to the job sites he

23 worked at. You will see a whole list that he can scroll

24 through to find a particular day if he has any doubts about it.

25 Then he clicks on that particular day and job site and it


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1 brings up the report for him.

2 THE COURT: When you say, Mr. Murphy, there have been

3 trial runs, and I understand there have, what does that mean?

4 This very system and workers have logged you on and determined

5 and confirmed the hours that are reported to them by a shop

6 steward or what?

7 MR. ANDRETTA: No, the member portal hasn't been

8 opened it the members yet.

9 THE COURT: What has been the test?

10 MR. ANDRETTA: We worked with the IG's group, and we

11 were reporting to them the discrepancies that existed, and I

12 guess they were dealing with them.

13 So the members get the screen for a particular day on

14 the job site that he worked. He checks it. And he could

15 either hit "return" and go back to that list, or he could

16 contact the inspector general's office, as you could see. And

17 what he does -- it brings up a screen for him that he could put

18 his phone number in. We populate the phone number based on

19 what's in his membership record. And then he could put20 comments that get sent to the inspector general's office. So

21 if he wants to be contracted by the inspector general, the

22 inspector general will follow up with the member.

23 THE COURT: In his comments he says that on

24 February 23rd I worked eight hours but only reflected six.

25 MR. ANDRETTA: Right.


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1 Now we also provide to the inspector general's office,

2 they could see any report at any time for any job site. But

3 what we did is provide them with filters so they could scroll

4 down to exactly what they're looking for. So that's a small

5 part of the system for the member portal as well. So the

6 inspector general can see pretty much everything.

7 It says: Are you sure you want to contact inspector

8 general? That's when you get that screen to fill in the

9 information. And that's pretty much it.

10 THE COURT: I got it.

11 Mr. Murphy, this system replaces a -- I'm guessing

12 because I don't really know -- a manual system, a paper system?

13 MR. ANDRETTA: We currently manage that system, your

14 Honor. It is a paper-based system. We redesigned the form

15 about five years ago where it could be scanned in and captured

16 the data electronically. Then we took that data and matched it

17 to the funds information, because we captured all the

18 remittance that comes in from the benefits reported to us.

19 Interestingly enough, when we started all this, the20 report was thick, the difference between what was reported by

21 shop steward and paid by benefits, by the employer. But within

22 a few months we had the report down to this much because we

23 were catching the differences that existed. So what would

24 happen is the problem with the paper reports, even though we

25 redesigned the form, they were still handwritten and still a


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1 lot of mistakes, and there was no way -- by the time the shop

2 steward got it to us, it was week later, because it had to be

3 reported to the union office and the local office. By the time

4 it got to us and scanned and got matched, it was on a monthly

5 basis, so we were already a month into it. So this brings it

6 has down to a daily level so we can capture the information

7 immediately.

8 THE COURT: Got it.

9 MR. MURPHY: If there is a dispute and it can't be

10 resolved informally, then it goes through the grievance and

11 arbitration process.

12 THE COURT: "Informally" meaning what? The shop

13 steward confers --

14 MR. MURPHY: Along with the staff rep, along with the

15 foreman, along with perhaps the person who is doing the

16 bookkeeping with the particular contractor to see what is going

17 on, if there's been a mistake.

18 THE COURT: I get that. How does that manifest

19 itself? Suppose the shop steward says I agree, it should be20 eight hours instead of six hours, is there a subsequent email

21 or that gets -- where does the record that --

22 MR. ANDRETTA: From my understanding, this could only

23 get resolved with someone from the district council involved in

24 the matter. It just be resolved between the contractor and the

25 employer. Once there's a differential reported, the district


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1 council is getting an email to make them aware that they have

2 to be involved in any resolution in that dispute.

3 THE COURT: Who does that?

4 MR. MURPHY: The staff representatives would do that.

5 Then there would be an email trail showing that back and forth,

6 that resolution on.

7 THE COURT: And so that's the informal resolution that

8 there's a final, so to speak, email that reflects agreement

9 between both the employer and the union and the employee.

10 MR. MURPHY: Right. That would be our understanding,

11 is that could be, if necessary, tracked down to see what was

12 going on if questions were raised later on.

13 If there are issues that can't be resolved that way,

14 then it can eventually go to grievance and arbitration

15 procedure. And one of the -- part of the compliance pieces, I

16 think enumerated number four in my February 13 letter to the

17 Court that the employer association agreed to is that if --

18 it's not a strict liability mechanism, but if an arbitrator

19 determines after a full hearing that what I'll call sort of the20 contractor has the mens rea and then the actus reus to violate

21 the collective bargain agreement, the arbitrator would be

22 empowered to issue an award that they are no longer able to use

23 full mobility, and they would have to use a system where they

24 could hire 50 percent and the other 50 percent would come from

25 the union's out-of-work list.


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1 THE COURT: So we'll come back to that in a minute,

2 because I take it that is somewhat of an issue in the proposed

3 stipulation and order which you suggest, that a return to the

4 out-of-work list usage is somewhat controversial.

5 But before we get to that, how does the arbitration

6 process compare with what is done today?

7 MR. MURPHY: It will be the same. We have contractor

8 arbitrators that would be designated in the bargaining

9 agreement. They operate on a rotating basis and schedule a

10 grievance arbitration on it, and the two sides present their

11 evidence, their witnesses, and the arbitrator issues an opinion

12 and award.

13 THE COURT: So I'm interested to know, "arbitration"

14 sounds like a big process, as it were. I take it arbitrations

15 are not for a dispute over two hours, or are they?

16 MR. MURPHY: If it could not be reconciled or even

17 compromised -- and this would be at the highest levels of

18 district council, and we contemplate even involving the

19 inspector general's office, if there's a knock down, drag out20 fight over two hours, you would look to avoid arbitration on

21 that, and see what could be worked out. That would be with the

22 member, with the shop steward, with the staff rep, with

23 officials above the staff representative, as well as counsel

24 for the district council, counsel for the contractor, the

25 contractor principal, if necessary, to see what could be worked


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1 out to avoid arbitration.

2 THE COURT: So I suppose that takes care of most

3 problems, or not, this informal process? I'm trying to figure

4 out what is left for arbitration.

5 MR. MURPHY: In the near term, historically, most

6 things get worked out. Claims get compromised with the consent

7 of the individual worker. There's an issue of pay, hours,

8 whether you worked on a holiday, that sort of stuff, but that

9 stuff is reconciled. Oftentimes the records are all gotten

10 together, the worker is just wrong or the shop steward was

11 wrong or the employer was wrong, and therefore, pays the money.

12 The arbitrations are generally -- I wouldn't say they're rare,

13 but it's not a very frequent thing that goes on when you have

14 to have a grievance arbitration.

15 THE COURT: If the kinds of issues are I went home

16 sick -- I don't know, that's what I'm trying to get a sense of.

17 MR. MURPHY: This is an effort to cut down on that.

18 MR. WALSH: Your Honor, Dennis Walsh, the review

19 officer.20 I want to emphasize the importance of a record being

21 made and distributed to multiple people of every quote,

22 unquote, informal resolution in the grievance phase. Our

23 experience has been in years past that that is a very fertile

24 area for corruption where things are basically forgotten and

25 tossed into the garbage.


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1 THE COURT: So if somebody works it out, so to speak,

2 you don't have a process.

3 MR. WALSH: Right. There needs to be formal

4 reporting, redundant reporting to the inspect inspector

5 general, to my office, to counsel. And it's the redundancy in

6 the reporting that ensures there's no shenanigans in these

7 settlements.

8 THE COURT: So even as to whether I was there four

9 hours or eight hours, and someone comes up and says well, it's

10 four or they say it's eight, you want to know how they got to

11 the eight, the basis for it?

12 MR. WALSH: Well, I think most importantly the

13 affected workers need to be informed by formal system as to

14 what the resolution is so they can actually serve as witnesses

15 if there's any corruption in that resolution. So I think email

16 is an effective way to do it with some sort of standard

17 formatting with distribution to affected parties and to my

18 office and the inspector general and counsel.

19 THE COURT: So are you comfortable with the system as20 proposed with the fact that the worker can log in? I guess

21 that person is the best check.

22 MR. WALSH: That is the most important component of

23 the system, your Honor.

24 In years past -- and Mr. Torrance referenced this --

25 La Cosa Nostra did control corruption. The easiest way to do


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1 it would be to pay a large number to a gangster who would then

2 guarantee safe dealings with the union. Money would be

3 distributed down to business agents and to shop stewards. In

4 other contexts employers on the first day of the job would seek

5 out the steward and say look, it's a hundred dollars a name per

6 week for every name that you leave off the shop steward report.

7 So the ability of the member who is on that job to anonymously

8 call and report any suspicious of corruption is the cornerstone

9 of this system, and it's really unprecedented, in my view.

10 THE COURT: Got it.

11 So what's the plan, as it were, with the roll out, are

12 you going to do it in phases?

13 MR. MURPHY: The labor management committee has very

14 graciously allocated or granted one million dollars to purchase

15 a thousand of the instruments, and they will be a thousand

16 dollars apiece. And they're guaranteed for six years, tech

17 support, parts, replacement. And shop stewards -- the shop

18 steward class is being offered every day this week, and the

19 devices are coming in. We would like to start the roll out on20 next Monday, March 4th.

21 If people don't have devices or somebody leaves their

22 device at home then they have an 877 toll free number to call

23 in where they will be staffed into the evening, and also be

24 staffed on weekends. And when shop stewards call in, give

25 their UBC number, who they are, and then there will be


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1 personnel at the district council to take that, the oral

2 reports over the telephone to enter that in, and then the shop

3 steward email and confirm that as a back-up while we get this

4 going.

5 And we're told by the company that every single week

6 there will be an additional between 50 and 100 devices coming

7 on line. We're just starting with this one contractor now. We

8 estimate, and I think the association estimates that at any one

9 time they may have between 250 and 300 jobs active on a daily

10 basis, so we hope to be in a position to cover all of that

11 beginning March 4th but also have the telephone back up for

12 that roll out as well on an ongoing basis in case somebody

13 forgets or that you don't have a shop steward on a one- or

14 two-person job, that can be called in either by the employer or

15 called in by individual workers. And they would have to go

16 through the same system of being able to check on their own

17 hours and who else reported with them.

18 THE COURT: So what is your estimate as to when this

19 system would be fully or likely to be -- what time period?20 MR. MURPHY: From what we're told by technology

21 people, about the third week in March.

22 THE COURT: Every job, every steward.

23 MR. MURPHY: But obviously with the technology and the

24 delivery of the devices there's a possibility of glitches.

25 THE COURT: I would imagine.


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1 MR. MURPHY: But we put in safeguards for that with

2 being able to report by telephone.

3 THE COURT: Got it. I should have asked before, is

4 this system used anywhere else?

5 MR. ANDRETTA: No, it's not. It's a customized

6 solution.

7 THE COURT: Is this a technology used in other locals

8 other jurisdictions?

9 MR. ANDRETTA: No, to our knowledge this is the first

10 of its kind.

11 THE COURT: So the more prevalent system would be

12 what, the paper system?

13 MR. ANDRETTA: Typically, yeah.

14 THE COURT: Forms, et cetera.

15 MR. ANDRETTA: It's interesting, I spoke to a union

16 out in LA last week and talked about this, and they had never

17 heard of anything like this either and they deal with shop

18 stewards as well. And they're very interested in following up

19 with something like this.20 I will say that the technology is complete, tested,

21 and ready, so I think what is happening now, what might take

22 the next couple of weeks is the training cycle. The training

23 began on Monday, I think there were 60 contractors there on

24 Monday already, and it went very well.

25 THE COURT: Good. There remains the issue -- you were


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1 saying, you touched on before about the possibility that if

2 there were some willful purposeful evasion of this system, that

3 under the agreement the out-of-work list comes back, so to

4 speak.

5 MR. MURPHY: It will go back to a 50/50 but only for

6 that particular contractor.

7 THE COURT: So explain that a little. That's sort of

8 a stick as opposed to a carrot.

9 MR. MURPHY: Right. It was seen by both the district

10 council and the top level leadership in the Wall Ceiling

11 Association that in order to make sure that people didn't get

12 tempted to do the wrong thing, there had to be the possibility

13 of really a Draconian sanction for that. But there are

14 safeguards, as I mentioned. It's not a strict liability

15 statute, say with an industrial polluter or something like

16 that, but you have to -- the district council would have to be

17 able to demonstrate by the evidence that this was somebody who

18 knew what they were doing, were intending to evade the system,

19 and took steps to actually do that before the arbitrator would20 be authorized to impose such a Draconian sanction on them.

21 THE COURT: So that would be -- I would imagine it

22 wouldn't just be a discrepancy between six hours and eight

23 hours on one day for one worker, right? That is probably

24 something more serious than that. How realistically could this

25 ever come about or could this come about? What's the


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1 contemplation? And would the return to 50 percent out-of-work

2 list use be temporary or forever?

3 MR. MURPHY: It would be for that contractor for the

4 duration of the collective bargaining agreement.

5 THE COURT: For the entire contract for all the job

6 sites.

7 MR. MURPHY: For that contractor for the duration of

8 collective bargaining agreement, yes.

9 THE COURT: Explain how that might come about.

10 MR. MURPHY: We have a hard time ourselves thinking

11 that somebody is going to evade the system or attempt to evade

12 the system with all of these safeguards in place and with the

13 members being able to log on and with the review officer's

14 office being able to be involved are the inspector general's

15 office being able to be involved. But if there were a pattern

16 of abuses where sort of like you caught me again kind of thing,

17 I could contemplate that maybe after the 10th time that we

18 caught them or something that the district council would say

19 that this is ridiculous, you only -- this is only happening20 when one of our retired member inspectors come on or we got

21 people blowing the whistle on you, that sort of thing. If you

22 play a catch-me-if-you-can kind of game, we need to do

23 something about that.

24 THE COURT: And this is the subject of an arbitrator's

25 ruling --


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1 MR. MURPHY: Yes.

2 THE COURT: -- whether or not it rises to a particular

3 level.

4 MR. MURPHY: Yes.

5 THE COURT: And as a remedy, the arbitrator determines

6 that we go back to 50 percent out-of-work list for this.

7 MR. MURPHY: Correct.

8 THE COURT: Got it. OK. Thanks.

9 Yes, sir.

10 MR. ROSEN: Good morning, your Honor, Mark Rosen for

11 the Wall and Ceiling Association.

12 At 8:35 last night I received an email of what I

13 presume to be the current draft of the collective bargaining

14 agreement.

15 THE COURT: I think I got it the same time. No, I

16 think I got it this morning. It was probably delivered to the

17 building, but I got it this morning.

18 MR. ROSEN: I just want to clarify that that draft has

19 not been agreed to in total. We're almost there, but there are20 still remaining issues to be resolved. The provisions of that

21 agreement as to mobility and the time reporting --

22 THE COURT: As to mobility and?

23 MR. ROSEN: And this time reported procedure has been

24 agreed to, but there are still other issues that remain

25 negotiation.


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1 THE COURT: So what does that mean? Is this coming?

2 I'm more conversant with an agreement that is an agreement as

3 opposed to a partial agreement.

4 MR. ROSEN: Nothing in this situation is common, your

5 Honor, but I would say what it means is the full mobility and

6 the accompanying time reported is the lynchpin of the new

7 agreement. Your Honor's term was meat and potatoes. If the

8 Court approves that, then the parties should be able continue

9 to negotiate in good faith and resolve the remaining issues.

10 But I don't want there to be a misunderstanding that we have a

11 complete collective bargaining agreement ready for signature.

12 THE COURT: No, I hear you, but I'm not exactly sure

13 why that would be the case. It may be an agreement if the hard

14 part is agreed to. When is the rest coming?

15 MR. ROSEN: Let me address the timing first, your

16 Honor. A memorandum of understanding was reached back in

17 August, and as counsel referenced, I think the ensuing months

18 were spent developing this system and getting it up and

19 starting it, and the association was very cooperative in that20 process.

21 THE COURT: So I understand.

22 MR. ROSEN: It was not until earlier this month that

23 the union said we want to get this implemented by the end of

24 this month, being February. By this time, we did not have a

25 draft collective bargaining agreement, we did not have anything


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1 in writing about the compliance procedures. So the association

2 took the initiative to draft something February 7 that we sent

3 to the union. We didn't get the response until this past

4 Friday. Monday we sat for several hours, met with them, and

5 resolved what I think are most of the issues. There were still

6 communications yesterday about some of the outstanding issues.

7 We didn't get the proposed order that was put in front of you

8 until yesterday. So this is kind of going on an expedited,

9 high-speed basis, and we're doing our best to try to resolve

10 the issues. But there are issues, and some of them are

11 important to my client that still need to be resolved.

12 Now it's my understanding that the collective

13 bargaining process and the specifics of those negotiations are

14 really not under the auspices of this Court. To the extent we

15 have an agreement that varies from the terms of the consent

16 decree, or in this case mobility, prior order of Judge Haight,

17 we do need judicial approval, but for the other specifics I

18 think the parties are free to negotiate and reach an agreement.

19 So I'm a little reticent to get into the remaining issues in20 dispute at this point, and if the Court directs me to, we will.

21 THE COURT: No, I'm less concerned with what they are

22 than why they're still hanging out there. It's a little bit

23 unusual. It's been a long time. This has been going for a

24 couple of years. Certainly the active negotiation and the

25 collective bargaining agreement, as I said at the outset, I


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1 have been hearing about it's imminent for over a year, two

2 years, perhaps, or maybe a year and a half. So I'm a little

3 surprised that it's not there. But I do understand that the

4 principal features are the full mobility issue and this

5 implementation. I do get that.

6 MR. ROSEN: Given the fact that we received the draft

7 on Friday, I think we're doing very well, quite frankly, to be

8 where we are today.

9 THE COURT: OK. So what's the doable proposition for

10 me in terms of approval, part of an agreement or specific the

11 full mobility aspect of it?

12 MR. MURPHY: The district counsel's position is that

13 all of the provisions to which the parties negotiated and

14 agreed to are incorporated into the new collective bargaining

15 agreement, that is, the MOA that was ratified -- agreed to on

16 August 22nd of last year and ratified by the district counsel's

17 executive committee and delegate body.

18 On Monday, Mr. Rosen raised other issues that I

19 understand from the agreement's negotiators were not raised as20 part of the negotiations, were not part of the deal that was

21 done back in August. So that's where we are.

22 THE COURT: So --

23 MR. ROSEN: Your Honor, clarification. Any issues I

24 spoke about on Monday were in our draft that was sent to them

25 back in -- I don't want to get into back and forth, but there's


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1 nothing new there on Monday.

2 THE COURT: I'm asking a simpler question, and that

3 is -- the simpler question is what is before me to approve? Is

4 there a collective bargaining agreement or do we have to wait

5 until there is a collective bargaining agreement, or is it a

6 preliminary approval of so much of the agreement that reflects

7 the full mobility concept and the implementation of this

8 technology? I'm trying to determine what you're asking me to

9 do.

10 MR. MURPHY: The union's position is that we think

11 there's a full collective bargaining agreement. Obviously,

12 if --

13 THE COURT: Doesn't sound like it.

14 MR. MURPHY: If the employer association is not

15 willing to sign it as it is now, then there's an issue with

16 that. But on a preliminary basis, given there doesn't seem to

17 be any dispute about the full mobility and rolling out the

18 compliance issues, that an order allowing the parties to do so

19 effective March 4th would seem to be appropriate unless20 Mr. Rosen has other views with that.

21 THE COURT: What about that, Mr. Rosen?

22 MR. ROSEN: I was answering your Honor's prior

23 question, what can we do today. The order submitted says the

24 mobility provisions and compliance provisions as reflected in

25 the draft are approved. And again, it's our understanding that


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1 that is what needs to be approved by the Court. So we can do

2 that today. I don't see that there's a need to or even really

3 a basis for the Court to approve the entire collective

4 bargaining agreement.

5 As far as implementation goes, I have communicated

6 from the get go it's the association's position we want to have

7 a fully agreed to collective bargaining agreement before these

8 changes go into effect.

9 THE COURT: I would think that, too. When is that

10 likely to happen?

11 MR. ROSEN: We have been negotiating in good faith.

12 We got a lot done on Monday. I think we had some discussion

13 early yesterday that was productive. I think if we continue to

14 negotiate in good faith we could get this resolved. Our

15 association is continuing to work towards this target,

16 implementation date, and if we can get this done, we will get

17 this done.

18 THE COURT: Mr. Walsh, do you have a thought about

19 that?20 MR. WALSH: There's a provision in this draft order,

21 your Honor, which I think is material to whatever ruling you

22 issue. I have always viewed your first ruling in this as a

23 provisional order subject to some verification from every

24 source that the system works, that it achieves everyone's

25 objectives, that reduces the likelihood of corruption.


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1 THE COURT: For sure. There's no way that we can say

2 that at this stage even if there were a fully embraced

3 collective bargaining agreement.

4 MR. WALSH: I think what is front and center as the

5 main issue of the parties is where do they stand if in 30 or 60

6 days I recommend to the Court this system be abandoned, that it

7 doesn't work. And I thought in my own view all along that the

8 contract would be a nullity at that point, because it is found

9 and the quid pro quo of full mobility and paying the members

10 the increased wages because of the expectation of increased

11 productive from these hand-picked crews. And I'm certainly

12 interested, with the Court's indulgence, in hearing from

13 counsel if that is the principal issue, because I think the

14 common sense resolution there is simply to recognize that this

15 entire contract is founded on this whole thing working, that

16 it's integral, and that they're back to square one if it

17 doesn't work, either by consensus or as a result of a Court

18 proceeding.

19 THE COURT: So have you looked at this proposed order?20 Does it reflect what you have just said or your thinking, or

21 does it have to be modified in some way to --

22 MR. WALSH: Well, I think the order is fairly

23 straightforward in recounting the discussions of the parties

24 and the legal backdrop.

25 THE COURT: The whereas clause.


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1 MR. WALSH: I don't think that it expressly says that

2 the parties have nothing if this does not work.

3 THE COURT: And does it need to say that?

4 MR. WALSH: I think that's perhaps up to the parties.

5 I believe that is the nub of the discussion that has to be

6 concluded in short order.

7 MR. FORREST: Your Honor, Loren Forrest from Holland &

8 Knight. I representing the Building Contractors Association.

9 Somewhat more of a housekeeping issue I was going to

10 bring up, but it effects actually substantively what we're

11 talking about today. The Building Contractors Association is

12 not being copied on a lot of correspondence to the Court.

13 THE COURT: Everything that we get we put on the

14 docket.

15 MR. FORREST: I understand that, but sometimes, your

16 Honor, it actually comes much, much later.

17 THE COURT: We put it on the day we get it.

18 MR. FORREST: Sometimes, for whatever reason, I'm sure

19 it's not related to your office, the Court, but sometimes we20 get it later. So I would ask that all the parties and the

21 Court recognize that the Building Contractors Association is

22 actually a party to this litigation, so we should be copied in

23 the first instance so people's correspondence to the Court --

24 for instance, I do not have a copy of the draft order that

25 everyone is talking about today, and I am not copied --


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1 THE COURT: It didn't come -- I didn't see it until

2 about an hour or two ago.

3 MR. FORREST: I know.

4 THE COURT: You shouldn't feel bad.

5 MR. FORREST: I understand, but we get updates --

6 we're not copied on a lot of correspondence. And I think

7 there's been a lot of parties in and out of the case, so I

8 could understand some of that, but I think now that we're

9 getting down to the full mobility provisions being addressed by

10 Court and affirmed and approved, we should all be copied on all

11 correspondence to your Honor, and I would ask that that be

12 done.

13 MR. MURPHY: The draft order doesn't address anything

14 with respect to the Building Contractors Association, so with

15 all due respect, I have no idea what he's talking about.

16 THE COURT: He's just expressing his opinion. If the

17 system is not working, the docketing system, which is the one

18 that I most rely upon for transparency with respect to anything

19 that I receive, then we ought to know about it. But frankly, I20 thought, and do think -- and it's not worth taking a lot of

21 time right now on that, I don't think.

22 MR. ROSEN: Your Honor, returning to the officer's

23 comments a few minutes ago --

24 THE COURT: Mr. Walsh's?

25 MR. ROSEN: Mr. Walsh's. What happened during the


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1 last negotiations for that contract, the employers agree to

2 significant increases in wages in exchange for more favorable

3 rules on mobility and referral, and then the Court struck rules

4 about mobility and referral and the contractors were left

5 paying the higher wages.

6 THE COURT: This happened when?

7 MR. ROSEN: I think 2009. The agreement was in 2005

8 or 2006.

9 Contractors are frankly scared this is going to happen

10 again, that we have a start-up pilot system that admittedly is

11 not in use anywhere in this country, is being implemented for

12 the first time. If the parties in the front row are unhappy

13 with the way that works --

14 THE COURT: I thought your position was that you

15 thought it was a reasonable way to go, because you suggested a

16 minute or so ago that full mobility and this compliance

17 mechanism you agree to.

18 MR. ROSEN: That's correct. But if in 60 days the

19 review office comes back and says this is not working, we have20 to revoke full mobility and go back the old way, we don't want

21 to get stuck paying the higher wages. So we proposed if

22 mobility is revoked, the wages revert back, we say, to whatever

23 is in effect now.

24 Now Mr. Walsh is saying we could provide if the

25 agreement becomes a nullity. I wonder about the practicality


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1 of that, because if the Court signs an order on Monday that

2 mobility is revoked, the agreement is a nullity, what do you

3 pay on Tuesday? What are the rules governing staffing on

4 Tuesday?

5 MR. FORREST: Your Honor --

6 THE COURT: Could we have one at a time? I get it.

7 You're not a party to that agreement, right?

8 MR. FORREST: No, but your Honor --

9 THE COURT: So just hold your horses for a minute.

10 So really, Mr. Rosen, is that right?

11 MR. ROSEN: Yes.

12 THE COURT: So frankly that relates to the issue that

13 I raised a couple of minutes ago, where is the agreement? So

14 instead of having this sort of theoretical discussion of what

15 ifs, et cetera, usually what lawyers do in a collective

16 bargaining agreement, they put in the provisions that they

17 think governs the collective bargaining agreement in the

18 agreement.

19 MR. ROSEN: And we have done that.20 THE COURT: So that's why I raised the question about

21 are we doing this piecemeal, or are you finished yet? If

22 you're not finished yet, when are you going to be finished? A

23 week? Ten days? I mean, you know, I don't -- I honestly don't

24 get your position on this.

25 MR. ROSEN: In terms of what?


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1 THE COURT: In terms of what you're complaining about.

2 You started by saying, I think it's quite clear, that you have

3 agreed that in exchange for offering a higher wage that you get

4 this full mobility provision, and you get this compliance

5 mechanism. I haven't heard anybody disagree that that

6 understanding has been reached.

7 MR. ROSEN: That's correct.

8 THE COURT: So I don't get what the problem is.

9 MR. ROSEN: Because of the history of this case and

10 the particular context of this case that was subject to

11 oversight by a review officer and this Court, we have to

12 provide for the contingency we heard last time, which is if

13 somebody comes in and says mobility -- which is contrary to the

14 consent decree -- has to be revoked, we're not stuck paying the

15 higher wages that we are giving now specifically for mobility.

16 And if the district council is willing to abide by Mr. Walsh's

17 proposal, I think my association might go along with it.

18 THE COURT: I am not a negotiator in your agreement.

19 As I said three or four times, I think it would have been20 cleaner and easier if you had had the agreement and presented

21 it. So it's very hard to give advisory opinions, if that's

22 what you're asking about, in the middle of a negotiation

23 process that you're involved in with Mr. Murphy.

24 MR. ROSEN: And I agree entirely.

25 THE COURT: I suggest that you finish your


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1 negotiation.

2 MR. MURPHY: I think that Mr. Rosen has accurately

3 stated what the issue is, that the association is concerned, as

4 unlikely as it may be, given that everybody is on board with

5 this system, somewhere down the line if the Court, review

6 officer, the U.S. Attorney's Office, says this is not working,

7 it's a disaster, we need to go back to the old referral system

8 of the May 2009 order, that the association would then be

9 arguing that we're not getting the benefit of our bargain. We

10 paid the increases in wages and benefits for the full mobility.

11 If we don't have full mobility, then we're not getting that, so

12 what happens? We get stuck having to pay those higher wages

13 and benefits.

14 That issue was not discussed, as I understand it,

15 because the counsel for either side wasn't involved in the

16 negotiations, which concluded back on August -- or right before

17 August 22nd of last year. There is a separability clause which

18 is typical in collective bargaining agreements that says if

19 something gets knocked out that everything else remains in20 effect, and I think that's probably what Mr. Rosen, on behalf

21 of his client, is concerned about. So that's where we are as

22 far as inking the collective bargaining agreement.

23 Where we are as far as rolling out the full mobility

24 on March 4th as well as all the compliance procedures, we're

25 there. Everybody is in agreement with that, and we're ready to


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1 go on that. So that's sort of the situation we're in.

2 MR. WALSH: Judge, I think the highest likelihood is

3 that there will be almost complete compliance in the industry

4 with this program. And I think the union and my association

5 and my office will use every effort to isolate the conduct in

6 question, and that it would be a huge step backward. And I aim

7 to salvage, if there a problem, as much of what is constructed

8 as possible. So I think it's highly unlikely that there would

9 be a circumstance so broad that I would ask the Court to

10 completely dismantle what has taken so many years to build up.

11 I think it's important that the association and the union

12 understand that.

13 THE COURT: So you're in favor of going forward now on

14 some preliminary basis?

15 MR. WALSH: I believe the sooner we get the compliance

16 program in place, the better. It will serve its purpose. It

17 will I think lead to the elimination of corruption as we know

18 it, and people will have to come up with new systems once they

19 understand the parameters of this one, to try to cheat. And I20 think it's going to be very difficult for them to do that with

21 the redundancy and the technology and the oversight.

22 THE COURT: You're of the same view, Mr. Torrance?

23 MR. TORRANCE: Yes.

24 THE COURT: What else?

25 MR. MURPHY: I'm of the same view also. So that's


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1 where we're at.

2 THE COURT: OK. So just so the record is clear, does

3 everybody think that the proposed order that was submitted to

4 me this morning works in the context of what we have discussed

5 here today?

6 MR. FORREST: Your Honor, I haven't seen --

7 THE COURT: You're not a party to that agreement. I'm

8 happy to hear you, but I really don't know that you have an

9 opinion as to whether that order, which is not involving your

10 union, works or not. So I would rather first hear from the

11 parties who are directly affected. I know you have an interest

12 in it, but I don't know that you're directly affected.

13 MR. FORREST: My only question --

14 THE COURT: Just hang on, if you don't mind.

15 So let's run through this again with Mr. Murphy and

16 Mr. Rosen.

17 MR. MURPHY: I believe that the paragraph four, the

18 decretal paragraph four of the order addresses the concerns

19 raised by Mr. Rosen, but he will have to comment on that20 himself.

21 THE COURT: Mr. Rosen, you feel it works?

22 MR. ROSEN: Paragraph four, as I communicated to

23 Mr. Murphy yesterday, does not address the concern that we

24 discussed.

25 I don't have a problem with the terms of this order,


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1 because, as I stated earlier, I believe what this order says is

2 it's approving the mobility and the compliance procedures as

3 set forth in the annexed CBA modifying the prior order of Judge

4 Haight. It's not saying that this proposed CBA is approved and

5 in effect, that we can't agree to, but that's not what this

6 order is saying.

7 THE COURT: How could it if there's no CBA? It's a

8 draft.

9 MR. ROSEN: So I think the reference to the CBA, it's

10 a draft, and looking at the specific provisions of the mobility

11 and compliance --

12 THE COURT: Which you're in favor of.

13 MR. ROSEN: We agree with those.

14 THE COURT: Got it. Anybody else?

15 Did you want to add something?

16 MR. FORREST: Only to the extent that there's a

17 proposed order that would modify previous orders by this Court,

18 specifically Judge Haight's order of 2009, dealing with

19 mobility provisions and modifying the percentage of carpenters20 coming from out-of-work lists and those issues affecting

21 anti-corruption and full mobility that would affect the

22 Building Contractors Association --

23 THE COURT: How would it?

24 MR. FORREST: Well, if the order --

25 THE COURT: How would this order affect you?


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1 MR. FORREST: If this order, as I understand it as I'm

2 hearing, would propose to modify Judge Haight's previous

3 order --

4 THE COURT: How would it affect you?

5 MR. FORREST: I haven't seen it, but those

6 percentages -- some

us v district council transcript of conf before judge berman 2-27-2013

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