An Arkansas pipeline contractor claims in a lawsuit that it expanded into Texas because its union pushed for the move and allowed the company to pay lower-than-average union wages, but new leaders at the local now refused to go along with the plan.
After a management change at the Local 798 of the plumbers' union in October, 2005, the situation changed for Collins Pipeline Construction LLC, Bald Knob, Ark., the company claims in a lawsuit filed July 25 in U.S. District Court in Little Rock, Ark. According to the lawsuit Collins lost a “substantial” amount of money invested in the expansion and eventually left Texas.
An attorney for the union could not be reached for comment.
Donald W. Collins started his company in 1979 and it built and maintained oil and gas pipelines and pipeline facilities. In 2002, Collins Pipeline signed a collective bargaining agreement with the union for work dealing with the construction and maintenance of mainline pipelines and underground cable. But in Texas union contractors were having a hard time competing with nonunion firms for pipeline construction and maintenance work.
So, according to Collins' claims, the local asked the contractor to expand into Texas.
"One of the specific purposes for this request was to allow the union to expand its 'footprint' into Texas and facilitate the penetration of union labor into the pipeline workforce in Texas," the lawsuit says.
Collins Pipeline says in the lawsuit that Local 798, based in Tulsa, promised the company could pay wages and benefits that were below those required by the union. The company adds that it invested millions of dollars in equipment, property and personnel to support its operation in Corsicana, Texas.
While working under the lower wage rates, Collins Pipeline was awarded large diameter pipeline jobs and "did substantial business in Texas," the lawsuit says. But when the union management changed in 2005, Collins' special arrangement ended, taking a big bite out of the company's finances and forcing it to shut its Texas operations.