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Trade unions agree to drop labor protest and work with developer on workforce issues

9/14/2012 | Real Estate Blog

Experienced developers are not strangers to controversy and legal spats. Because of the nature of their work, there is often a lot of competition, disagreement in how to make use of limited space, labor disputes, and various other issues that come up.

Developer Michael Pstronk-a partner in Post Brothers, which owns the Goldtex-is currently in the process of converting the Goldtex into rental apartment, breaking with Philadelphia tradition by employing a mix of union and nonunion workers. The decision has angered the Philadelphia trade unions, which have protested at the Goldtex construction site for the last six months. It was only in the last week or so that they agreed to end the protest after Rep. Bob Brady convened talks to discuss the matter.

The trade unions reportedly agreed to drop their demand that Pestronk hire a fully unionized workforce in exchange for Pestronk’s promise that Post Brothers would encourage its subcontractors to include more card-carrying union members in their crews. Pestronk didn’t detail any percentages of union hires, nor was any written agreement hammered out. Only a framework of sorts was agreed upon.

One of the difficulties of this kind of situation, from a development perspective, is that union workers earn higher wages, making it difficult to finance new construction. Pestronk’s decision to hire a mix of workers has been an important topic among Philadelphia developers, who have all struggled in this economy to make their projects work. Some are predicting that more developers will be hiring nonunion workers for upcoming projects.

If this does become a trend among Philadelphia developers, there will likely be more resistance from trade unions.

Source: Philadelphia Inquirer, “Brady negotiates deal to stop union protests at Goldtex construction site,” September 12, 2012