PAGE 10 | February 5 , 2016 | NORTHWEST LABOR PRESS
Southern Oregon University pays $2.5 million wage
settlement to workers who built new campus dorms
By Michael Gutwig
Editor & Manager
A $2.5 million wage settlement
announced in December by the
Oregon Bureau of Labor and In-
dustries (BOLI) on a construc-
tion project at Southern Oregon
University (SOU) in Ashland
had nothing to do with rogue
contractors cheating workers. It
was about how the public univer-
sity handled the bidding process.
The $56.6 million project —
the largest construction project
in Ashland’s history—included
nearly 200,000 square feet of
new residence halls and a
25,300-square-foot dining hall/
common area. The 700-bed
Leadership in Energy and Envi-
ronmental Design (LEED)-cer-
tified facility replaced the uni-
versity’s Cascade dormitory
with two, four-story buildings.
SOU was the contracting
agency on the project, which
was completed in September
2013.
Several sub-contractors were
union shops.
SOU has undergone more
than $130 million in scheduled
and completed capital improve-
ments since 2010. According to
the Medford Mail Tribune,
about $47 million of the funding
was state-allocated, roughly $29
million was paid for through
student fees, and the remainder
—$56 million—was part of a
public/private investment agree-
ment tied to the two new resi-
dential halls.
A report on SOU’s web site in
March 2012 (prior to the start of
construction of the dorms and
dining hall) stated that the uni-
versity had entered into a part-
nership with the publicly-traded
Texas-based American Campus
Communities (ACC) and its
team of general contractor
Adroit Construction of Ashland,
and SERA Architecture of Port-
land to build the dorms.
The university said the part-
nership “allows SOU to enter
into a ground-lease arrangement
that results in the university
owning the structures at the end
of the lease. The project is fi-
nanced through a separate non-
profit foundation, freeing capac-
ity to fund other campus
projects. No public funds are
spent on the project.”
Construction union leaders
say public/private partnerships
are often schemes used to skirt
state prevailing wage laws. Un-
der the state “little” Davis Ba-
con Act, construction workers
on public works projects must
be paid wages and bene fits that
prevail in that region of the state.
BOLI regularly establishes pre-
vailing wage rates for commer-
cial work, and a separate wage
rate for residential work, which
is lower than commercial rates.
According to BOLI’s investi-
gation, SOU put out a single re-
quest for qualifications, stating
that the demolition of the exist-
ing residential/dining facility
“will require the development of
a new dining hall that will ac-
commodate the updated resident
total. The dining facility replace-
ment should be integrated into
the development concept.”
SOU’s request for proposals
also referenced the “ground
lease” arrangement, with the de-
veloper to build the dorms and
replacement dining facility, re-
ferring to both aspects as “The
Project.”
Jon Flegel, a business agent
for IBEW Local 659 and head
of the Southern Oregon Build-
ing Trades Council, said two
electrical sub-contractors on the
project were union shops. He
said the union — using BOLI’s
prevailing wage determination
book — advised its signatory
contractors to bid at state resi-
dential prevailing wage rates for
the dormitory work, and at state
commercial prevailing wage
rates for the dining hall work.
Flegel said no issues were raised
about wages. When electricians
worked on the dorm they were
paid at union-scale residential
rates. When they worked on the
dining hall they were paid com-
mercial prevailing wage rates,
he said.
Drew Waits, a union rep for
Plumbers and Fitters Local 290,
said he initially advised signa-
tory contractors not to bid the
dorm, concerned that they might
not be able to find enough work-
ers to staff the project because of
the lower residential pay scale.
Two signatory contractors went
ahead and bid it at union scale
for residential, and Peninsula
Plumbing of Portland won the
contract.
Plumbing on the dining hall
went to a nonunion company.
Starting in late 2013, BOLI’s
Wage and Hour Division initi-
ated a series of prevailing wage
audits after questions arose
about the SOU project during a
separate investigation. Investi-
gators determined it to be a sin-
gle project that was improperly
divided. As such, it should have
been bid as a public works proj-
ect under commercial prevailing
wage rates.
Charlie Burr, a spokesman for
BOLI, told the Labor Press that
in making that determination, in-
vestigators found in part that
SERA designed all three build-
ings; their drawings and specifi-
cations referred to the entire proj-
ect as the “SOU North Campus
Village;” and the drawings and
specifications for the dining hall
were included with the drawings
and specifications for the resi-
dence halls. The agency also
noted that Adroit Construction
acted as general contractor on the
whole project, and most of the
first-tier subcontractors worked
on both the residence halls and
the dining hall. All three build-
ings, which are adjacent to each
other, were completed in the first
week of September 2013.
The prevailing wage inquiry
— comprised of 80 audits —
determined that 383 workers
employed by 44 contractors
and/or sub-contractors on the
A work injury may
involve workers’
compensation, social
security and personal
injury, the three main
areas of concentration
for our law firm.
dorm project weren’t paid in ac-
cordance with state commercial
prevailing wage rates, and were
owed $2,569,387. On the plumb-
ing side alone the difference was
$124,502.85.
In late December 2014, BOLI
sent wage demands for the un-
paid wages. The agency secured
$52,000 in wage payments for 58
workers. Not surprisingly, the
remaining contractors and sub-
contractors refused to pay.
BOLI said that according to
Oregon statute, as the contracting
agency, SOU was liable for the
unpaid wages.
SOU hired the law firm of
Stoel Rives to argue their case.
Following months of negotia-
tions, a deal was reached on
Dec. 7, 2015. As per the agree-
ment, the university sent a check
to BOLI in the amount of
$1,508,542.88 on behalf of 179
workers. The agency mailed
payments to those workers on
Dec. 30, 2015. One member of
Plumbers and Fitters Local 290
received a check for about
$14,000, Waits said.
For the remaining 146 work-
ers — collectively owed around
Turn to Page 11