Employees hired or promoted into a classification listed in Table I

or II after the effective dates indicated therein shall start at the rate set forth in Column 1 of the applicable table. After 60 days of employment they shall receive an increase to the rate specified in Column 2 of the applicable table. After 90 days of employment they shall receive the rate specified in Column 3 of the applicable table.

If an employee is laid off and thereafter recalled, he shall receive the rate in effect at the time of layoff and shall be credited with the time worked prior to the layoff for purposes of rate progression.

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*There shall be one Coordinator from each of the three crafts signatory to this Agreement. The Coordinator shall work with and supervise all lower grades within his respective jurisdiction. Any additional coordinators will be at the Employer's discretion.

**Maximum time spent in this classification shall not exceed four months, after which they shall be reclassified into Group V.

The implementation or the signing of this Agreement will not serve to reduce the wage rate or classification of any employee currently employed by the Employer.

IN WITNESS WHEREOF, we have set our hands and seals this

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Senator TOWER. Our next witness is Mr. William E. Dunn, executive vice president, the Associated General Contractors of America. Mr. Dunn, we are delighted to have you appear today. We have your statement. We will print it in its entirety in the record. You can either read it in full or you can summarize it.

You may proceed in any way that you choose. If you would, introduce the gentlemen who are with you.


Mr. DUNN. I would like to introduce Mr. Donald A. Giampao, on my right, director of legislation and special programs, and Mr. Arthur Hintze, on my left; a member of the national agency, staff. Mr. Chairman, it is a pleasure to be here and to present our position on pending legislation S. 3373 and S. 3654.

We would like to have our statement filed in the record.
Senator Tower. It will be printed in full.

Mr. DUNN. At this point, I would like to highlight some of the points in the testimony, Senator.

In brief, we are concerned with the building codes, the restrictive practices, and the need for repeal of the Davis-Bacon Act. All of these items are restrictive in nature, and they impede growth and productivity.

Whatever their purposes were at one time, they must now all be regarded as against the public interest. They are restrictive and they are protectionist in theory, and in practice. They protect the status quo, whatever it is, and they present advance in technology and productivity.

Now, we have made a study in our association, and I represent the associated general contractors of America, with 9,000 members doing the greater part of all contract construction, both public and private in the United States.

Our study was made in September 1970, on restrictive practices that prevail in the building and construction industry. I would like to have that put in the record, Senator, as a documentation of the problems we are up against in trying to keep up productivity and advance in our industry where through contract agreements, we have built up these restrictions in our labor agreements around the country.

It is true they are in our agreements through voluntary collective bargaining, and I say "voluntary" in quotes. Sometimes they are not a big item at a particular time, but collectively over the years they have increased the cost of construction by 10 to 15 percent.

We are talking about a $100 billion business. We are then talking about 10 to 15 billion dollars that is not earned because it is not productive. I am talking about the situations that our survey reveal, such as a limitation on output, the size of crews, the overmaning of jobs, the use of skilled men to do unskilled work, the limitation on off-site con

struction, requiring certain work be done on the site, such as prefabrication, such as threading pipe.

The hiring hall procedures are restrictive in nature. They restrict management's right to manage. That has been given up by collective. bargaining because it is permissible to do something like that, and therefore, it becomes part of our collective bargaining process and it is in many, many of our agreements.

All of these restrictive practices are detailed in this study which I would like to introduce in the record at the end of my testimony. Senator TOWER. Would you yield for a question at that point? Mr. DUNN. Yes.

Senator TOWER. Are you saying in effect, that organized labor has enjoyed a statutory wall of protection that has given them an unfair advantage in the collective bargaining process?

Mr. DUNN. Yes, I think so. I will tell you why.

The Supreme Court said in a rather famous case in 1967, called the Woodworker's case or the "Philadelphia Door Case," in a five to four decision, that the unions had a right to strike for and get protective clauses in their labor agreements that would prevent a contractor from putting precut doors in a building, and these were called "Preservation of Work Clauses."

The concept, really, is anathema to growth and productivity and advancement. If you can put a clause in a labor agreement or in anything else that preserves the status quo, it means you are satisfied to stand still, and in this case, the preservation of work clause was in the carpenter's agreement with the Association of Contractors in Philadelphia. That prohibited the contractors from using doors, in any of their construction projects, because they were precut, even though this can be done more efficiently in a factory.

A strike ensued and it went to the Supreme Court. I think it is very important to cite something that was said in the majority opinion, because it brings us right back to Congress. The Supreme Court admitted that it was horrible, it was against our concepts of what should be done, but they said, "It is a matter for Congress."

I would like to read, Senator, just a few words here, about the concept of Congress' right to legislate. It says:

Finally, important parts of the historic accommodation by Congress of the powers of labor and management are section 7 and 13 of the National Labor Relations Act, passed as part of the Wagner Act, of 1935, and amended in 1947.

The former section assures to labor, the right to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid, or protection . . . Section 13 preserves the right to strike, of which the boycott is a form, except as specifically provided in the Act. In the absence of clear indicia of congressional intent to the contrary, these provisions caution against reading statutory prohibitions as embracing employee activities to pressure their employers into improving the employees' wages, hours, and working conditions.

It said here further, "The Woodworker's Manufacturing Association" they are the members that manufacture these doors.

Senator TOWER. Mr. Mahin, representing that organization, testified yesterday.

Mr. DUNN. I just want to make this point. It said:

And the friend of the court, who support its position advanced several reasons grounded in economic and technological factors why, 'will not handle' clauses should be invalid in all circumstances.

Those arguments are addressed to the wrong branch of the Government. It may be that the time has come for reevaluation of the basic content of collective bargaining as contemplated by the Federal legislation. But this is for Congress. Congress has demonstrated its capacity to adjust the Nation's labor legislation to what, in its legislative judgment, constitutes the statutory pattern appropriate to the developing state labor relations in the country. "Major changes were made in 1947 and 1959."

They are long overdue because we have gone past the 12-year cycle. I would like to have this excerpt from the opinion printed in the record. Senator TOWER. It will be printed in the record (see p. 361).

Mr. DUNN. I think it is significant that at this time we are asking Congress to say something specific, since the courts have run out of legislative direction and intent, and we are in a position where we cannot go back to the Supreme Court.

I wish we could. We are working with NLRB now, which is in a very limited limbo, as to whether this decision means that even though the architect or the engineer directs a new kind of process, or a new product, and it is out of the hands of the contractor, can a union still strike?

That is up in the air, and that needs to be clarified. So, we certainly hope the Congress takes a look at this subject. We have not had very much luck and success in going to the other branches of this Senate, including the committee handling labor legislation.

Many bills have been introduced. I think you have introduced bills, and by the way, we would like to go further than this bill and go to the full bill, S. 3036. I see great similarity between Davis-Bacon, and all these restrictive agreements that we have agreed to, but they should be outlawed, as the "hot cargo" was outlawed. You know "hot cargo" was outlawed in 1959 except from the construction industry, and that was a deal that was made in Congress to save the building trades from that law, and because they asked for common-situs picketing, which had nothing to do with either bill in the Congress. It was thrown in but it was not germane. It was only because of a threat of a parliamentary objection that it was kept out because they had the power to get it even though it would be unprecedented.

But, they had to get something, and in that closed conference came accommodation, that is what it was, by which they got the subconcontractor clause which permits them to control the subcontractors or attempt to, and other things which we think should not be in there. That is a form of "hot cargo." We think that the limitation put on construction in the abandonment of the "hot cargo" should have been right across the board, and we have asked that appropriate legislation be introduced in the past on that point.

But, on the subject of restrictive practices, I would think the intelligent leadership that we see demonstrated in the building trades at the present time should be pleased to see the Congress come to their assistance, because they are asking for increased productivity.

You know, a nation gets soft and satisfied with protection in tariffs. I know you are an authority on economics and I am not.

Senator TOWER. No, sir. I am not an authority on economics.

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