Arkansas contractor battles union over wage arrangement

07/30/2008

By Mark Friedman

An Arkansas pipeline construction contractor says it expanded into Texas because its union pushed for the move and allowed the company to pay lower than average union wages.

But after a management change at the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local Union 798 in October 2005, the situation changed for Collins Pipeline Construction LLC of Bald Knob, Ark.

The union says Collins Pipeline could no longer pay the lower wages, according to Collins Pipeline's lawsuit filed July 25 in U.S. District Court in Little Rock, Ark.

As a result, Collins lost a "substantial" amount of money and eventually left Texas, the lawsuit says. A union official refers calls to its attorney, Louis Robein Jr. of Metairie, La., who did not return a call for comment.

Donald W. Collins started his company in 1979 and handled the construction and maintenance of oil and gas pipelines and pipeline facilities. In 2002, Collins Pipeline signed a collective bargaining agreement with the union for work dealing with the construction and maintenance of mainline pipelines and underground cable.

But in Texas union contractors were having a hard time competing with non-union firms for pipeline construction and maintenance work.

So the Union asked Collins Pipeline to expand into Texas.  

"One of the specific purposes for this request was to allow the union to expand its 'footprint' into Texas and facilitate the penetration of union labor into the pipeline workforce in Texas," the lawsuit says.

Collins Pipeline says in the lawsuit that the union promised the company could pay wages and benefits that were below those required by the union. The company adds that it invested millions of dollars in equipment, property and personnel to support its operation in Corsicana, Texas.  

While working under the lower wage rates, Collins Pipeline was awarded large diameter pipeline jobs and "did substantial business in Texas," the lawsuit says. But when the union management changed in 2005, Collins' special arrangement ended.

"The Union's actions had a devastating effect upon (Collins Pipeline's) business," the lawsuit says.

The company said it couldn't land pipeline projects because it couldn't pay the higher wages. As a result, Collins Pipeline's revenue and profits fell. The company has also closed its Texas operation.

Collins Pipeline is suing the union for interfering with its business and is seeking an unspecified amount of damages.

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