The National Labor Relations Board (NLRB) Sept. 28 decided that an Ohio contractor violated employee rights by challenging a job targeting program in a state court. 

Job targeting programs, also known as market recovery funds, are designed to drive nonunion contractors out of specific markets and out of business. Using job targeting, unions collect worker fees to pay wage subsidies to selected contractors. The subsidies in turn give those contractors an unfair bidding advantage on projects. 

In 1990, J.A. Guy Inc. was a participant in the United Association of Plumbers and Pipe Fitters job targeting program and was awarded a county project in Pickaway County, Ohio. The job targeting program was funded by voluntary deductions from union members’ wages who were employed on a state-funded project. ABC member J.A. Croson LLC, who also bid for the county project, later filed an administrative complaint and a lawsuit in state court charging that the wage deductions included in the job targeting program violated state law. 

In 1998 the Ohio Supreme Court ultimately decided the lawsuit was preempted. The next year, an unfair labor practice charge prompted the NLRB general counsel to issue a complaint against Croson, claiming its lawsuit was unlawful because it was preempted by the National Labor Relations Act (NLRA), it was unsuccessful and it was retaliatory. The counsel later narrowed the complaint and only claimed the lawsuit was unlawful because it was preempted by the NLRA, after the U.S. Supreme Court found that an unsuccessful lawsuit was protected under the First Amendment as long as it was “genuine” and “reasonably based.” (BE&K Construction Co. v. NLRB, 536 U.S. 516, 170 LRRM 2225). 

An administrative law judge dismissed the complaint in 2003, but the general counsel filed exceptions and the case dragged on for more than a decade. 

Ultimately, NLRB Chairman Mark Gaston Pearce and NLRB Members Richard F. Griffin and Sharon Block decided that J.A. Croson’s lawsuit was outside the protection afforded by the First Amendment because it was preempted by the NLRA. NLRB Member Brian Hayes dissented, arguing that not only was Croson’s lawsuit not preempted by federal law, but that it was protected by the First Amendment even if it failed because Croson had a reasonable belief that a Ohio state court had jurisdiction to hear the case.