Labor debate draws crowd at Cloquet council meeting

With a potential project labor agreement vote on the Cloquet City Council agenda, union members from Duluth, Superior and beyond packed City Hall Tuesday. Well over 100 people, mostly men, filled the council chambers and the atrium, the hum of their voices outside the meeting room making it difficult to hear Mayor Roger Maki as he opened the meeting.

In the end, councilors voted 5-2 to table the issue, with Maki and Ward 4 Councilor Kerry Kolodge dissenting.

That vote to delay a decision came after extensive discussion, starting with a recap of the arguments Cloquet Economic Development Authority members made when they pitched the idea of eliminating any requirement for private businesses to sign a PLA last month. Instead of mandating a PLA, the EDA wants the city to incentivize the business owner by allowing the EDA to add 15 percent to any loans or other financing if a private business chooses to sign a PLA.

It seemed like a slam dunk, with EDA members and Community Development director Holly Hansen pointing out that not a single private business has signed a PLA in Cloquet since the city adopted the policy in 2017 anyway.

"The city is actually harming the public because many such private projects are simply being abandoned because our local Cloquet businesses do not want to adhere to the PLA requirements," Hansen said.

What exactly is a PLA?

Project labor agreements are collective bargaining agreements between building trade unions and contractors that govern terms and conditions of employment for all craft workers - union and non-union - on a construction project. The labor agreement is between an owner and a regional building trades council: in Cloquet's case, the Duluth Building and Construction Trades Council. Private projects are required to sign a PLA in Cloquet if they utilize more than $175,000 in city loans or other forms of gap financing.

While the Cloquet PLA was changed after a 2021 lawsuit - still active - so it no longer requires workers to belong to a union, city code still requires employers to pay the agreed-upon wage, and pay into the union's trust fund during the project.

"Lots and lots of places have inquired about economic development projects within the city of Cloquet," city administrator Tim Peterson said. "We might not be able to tell you their names because they don't want us to, but the point is that zero of [those businesses] signed a project labor agreement."

Let's talk

Given only five minutes to speak their piece, union leaders took quick turns at the podium. Most asked the council to delay its decision or support the PLA as written.

Andrew Campeau, president of the Duluth Building and Construction Trades Council, spoke first, "on behalf of 7,000 construction workers in the area." Campeau said there would be consequences to eliminating the PLA, because without a PLA, projects are subject to work stoppages, labor disputes and issues such as wage theft.

Dan Olson, vice president of Duluth Building Trades, chided the city for not contacting Duluth Trades when they started discussing the PLA change last month, offering to be part of the solution.

Minnesota AFL-CIO president Bernie Burnham also spoke, noting that she represents some 300,000 union members in the state of Minnesota.

"It is important we have people working in our cities and towns who earn living wages and benefits. Unions provide this," said Burnham, who was previously president of the Duluth Federation of Teachers and vice president of Education Minnesota.

"I encourage you to embrace project labor agreements as a way to keep your Cloquet community strong," she added.

Local business owner and union electrician Ryan Osvold, a Cloquet Class of 1996 grad, Carlton resident and part-owner of the River Inn Bar and Grill in Scanlon and Third Base Bar in Carlton, said he makes a good living as a union member. He also said they work hard to make sure their employees earn a good living.

"We talk about affordable housing," he said. "Well, maybe we should just make sure they can get the housing they want. A PLA helps do that."

Oswald talked about his own experience working under a PLA in Duluth, noting that it was the PLA that kept him going to work, even when he knew the company he worked for at the time was going bankrupt.

"I had to stay on that job for three weeks of 10-hour days, five days a week, without pay, because of that PLA," he said. "We got the job done. That's what the PLAs do for you. They get the job done and they get it done right."

Former state representative and Esko resident Mike Sundin also spoke, noting his 44-year membership of Duluth Building Trades as a painter.

"This ordinance 505A is actually a moral document as well," Sundin said. "You are telling your people, my people, my workmates here, that they don't count. These people are members of your community and they deserve a good hearing and full reconsideration of 505."

Repeat issue

This is at least the third time in five years that the EDA has asked the city to remove the PLA requirement for private businesses. Each time the PLA debate resurfaces, the audience is heavy on union members and light on business leaders.

On Tuesday, Hansen read a 2017 letter from Mike Schultz, former mill manager at the Sappi Cloquet mill, now vice president of manufacturing for Sappi North America.

Schultz said Sappi utilizes union contractors whenever practicable, "However, based on my personal experience when Potlatch built the pulp mill through the '90s under a PLA, we had very significant negative economic impact trying to force the use of union labor where the expertise we needed for certain specialty work was non-union," Schultz wrote. "This isn't a union versus non-union issue for us. This is an efficiency issue."

Schultz also referred to housing projects that were "scrubbed as a result of the PLA requirement," noting that the No. 1 complaint Sappi gets from new employees is the lack of housing in Cloquet. "This is just one more thing that hurts our overall competitiveness as a mill," he wrote.

Peterson addressed arguments about the negative impact on local workers that removing the private business requirement from the PLA might have.

"Again, we have had zero project labor agreements signed for private development. Zero. There can't be a reduction in wages from zero. We can't get any lower," he said. "Our hope is to drive economic development and create additional projects [that] additional wages would stem from."

City attorney Bill Helwig called the private PLA requirement an economic issue. So did EDA member Kelly Zink, also the Cloquet Area Chamber of Commerce president.

"The city of Cloquet has opportunities now," she told the Pine Knot after the meeting, speaking as an EDA member and hinting at confidential discussions happening with businesses now. "If you drive down Cloquet Avenue, Highway 33, the West End, there are areas that need development or redevelopment. The city of Cloquet and northern Minnesota support unions, but we have to look at the track record of this private PLA requirement - the data - which is zero private developments using a PLA. Incentivizing a PLA versus mandating it could be a win-win for both labor and business."

Other than the PLA issue, it was a light council agenda Tuesday. Only one resident, Charlie Arfman, spoke during the public hearing on utility assessments for the 14th Street project. After disputing the cost of having two hookups installed for his empty lot, he agreed to request a connection fee in lieu of assessment, so he won't have to pay until the utilities are used. The council passed the proposed assessments unanimously.