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Contractors on Honolulu public works projects over $2 million must use union labor under a new agreement signed by Mayor Kirk Caldwell on Wednesday.

The community workforce agreement says that if a nonunion shop wins a city bid, they must hire union workers. Nonunion shops can select up to seven of their own “core” employees. However, the company would need to hire one union worker for every nonunion worker, and those nonunion workers need to pay union dues.

The agreement, also called a project labor agreement, prohibits strikes, requires arbitration for disputes, and promotes apprenticeships and the hiring of veterans.

Caldwell said the deal is a first of its kind in the state and will ensure large city projects are done by qualified personnel and on time.

“The benefit falls to the people of the City and County of Honolulu because you have people who know what they’re doing, (are) well-trained and they’re following all the protocols,” he said.

Honolulu negotiated the agreement with Nathaniel Kinney, executive director of the Hawaii Construction Alliance; Gino Soquena, executive director of the Hawaii Building and Construction Trades Council; and the groups’ affiliated unions.

“Today is a great day for Honolulu and a great day for organized labor,” said Wayne Kaululaau of Hawaii Teamsters Local 996. “As we move forward, public works projects will be performed by workers who are well-trained and receive continuous education to perform their job in a safe and efficient manner. These workers are often paid decent wages, great benefits and excellent pensions.”

The agreement was made possible by . It was fiercely opposed by non-union companies and trade groups, even after the threshold was raised from $250,000 to $2 million.

Two-thirds of Hawaii’s approximately 4,500 licensed contractors are non-union, according to the Hawaii chapter of Associated Builders & Contractors, a trade organization.

Even though the agreement says the city can’t discriminate against nonunion labor, it essentially shuts them out, according to Jeffrey Durham, president of ABC’s Hawaii chapter. Nonunion workers would have to pay union dues without getting full union benefits, he said.

And limiting competition will only raise costs for taxpayers, Durham said.

“This is taxpayer money,” he said. “It should be a fair and level playing field for everyone.” 

Durham said the city’s stated reasons for supporting the agreement are flawed. Non-union companies pay their employees the same wages as union companies on public works jobs – the prevailing wage required by state law, he said. And 80% of their workers are already required to be local.

Manahan said he backed the idea because unions stand between workers and “unscrupulous” employers.

“I really believe in what unions do,” he said.