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In March 2020, the Portland City Council voted unanimously to change the rules for city contractors.
The upshot: To get a contract with the city, companies had to obtain a “labor peace agreement” with a union. In such an agreement, companies pledge to remain neutral in any union negotiations and not to block labor organizing. In return, workers pledge not to strike or create a work stoppage.
The new clause applied to just three kinds of contractors: industrial laundry, janitorial, and private security services.
It was celebrated as a step forward for workers’ rights in the industries most prone to abuse employees. Mayor Ted Wheeler said the measure would “help to foster positive working conditions for workers in high-risk industries.”
Two years later, the city ordinance faces legal challenges from two companies that lost contracts under the new rule. Both employ security guards.
They allege that a policy intended to improve fairness has instead resulted in an international corporation taking work away from small, local businesses and has cost Oregonians with disabilities the chance to get jobs.
The legal challenges demonstrate a tension: Many companies that are locally owned and have laudable missions are also resistant to labor organizing. Another reason the city passed the ordinance, in city staffers’ own telling in internal 2020 emails shared with WW, was to create inroads for unions in those companies. Instead, the companies are losing contracts to out-of-town corporations.
Dennis Steinman, an Oregon civil rights lawyer who has represented clients under the American with Disabilities Act, says the policy, while well meaning, could offer a lesson in unintended consequences.
“There are many statutes and local codes that on their face appear neutral,” Steinman says, but some of them actually have “an adverse impact on a particular class, and in this case, it would be the disabled community. It’s certainly narrowing the scope of who might be able to bid on contracts.”
For 24 years, Portland Patrol Inc. provided security guards for Portland Downtown Clean and Safe, the enhanced service district that keeps downtown tidy by charging a fee to businesses within its boundaries.
This year, that changed.
That’s because the city renegotiated its contract with Clean and Safe, closely affiliated with the Portland Business Alliance, largely to increase its accountability. Among the deals City Hall struck: Clean and Safe would abide by the city’s procurement policy.
Like it had many times before, Portland Patrol submitted its bid in mid-May. But now there was a new requirement: It needed to obtain a certified labor peace agreement with a union.
The company did not obtain such a letter. Portland Patrol does not have a unionized workforce.
The company is small, with only 130 employees. Ninety percent of its workers are employed through government contracts, says owner William Guidice—including formerly homeless Portlanders who work as resource officers on MAX trains.
The Clean and Safe contract instead was awarded to GardaWorld, a company based in Canada that has endured allegations of losing millions of dollars stored for clients in its vaults and creating unsafe working conditions that led to deaths (see “Coming in Hot,” right.)
Guidice filed a grievance with the city over the decision June 7.
Another company that submitted an application bid for the Clean and Safe contract, Northwest Enforcement Inc., which provides security for the eastside enhanced service district, has retained legal counsel to fight the policy.
“By law, any group of employees at any point have the legal right to band together and vote for a union,” says Northwest Enforcement vice president Chad Withrow. “This labor peace agreement forces that action. It almost makes it a guarantee that there will be a union. That’s outside of the city’s purview.”
Meanwhile, WW has learned DePaul Industries, a company that employs disabled Oregonians, sued the city late last year in federal court over the same labor peace agreement clause.
DePaul, which provides unarmed security guards, filed the lawsuit in December after the city rejected the company for a security contract because it did not obtain a labor peace agreement. (The contract was for four unarmed guards at Mt. Tabor Park. Disabilities can range from PTSD to partial deafness.)
DePaul is a contractor for a state program called Oregon Forward that requires municipalities to use companies that employ disabled workers whenever such a contractor is available to provide the needed service.
“Oregon laws governing the Oregon Forward program preempt the city’s requirement,” the lawsuit reads. “Among other things, they prohibit cities from developing ‘specifications that inhibit or tend to discourage’ contracting with Oregon Forward contractors.”
The ongoing lawsuit says the city’s ordinance should not override state rules.
In court documents, city attorneys argue that nothing in Oregon Forward rules exempts its contractors from adhering to local ordinances.
The city has contracted with DePaul for various security and janitorial services for 18 years. Seventeen DePaul employees currently work for the city under different contracts.
Attorney Cliff Davidson represents DePaul. He says the city’s rule placed his client in an impossible bind.
“If a contractor does not accept the union’s demands, then that contractor cannot do business with the city. Period,” Davidson tells WW. “Thus [contractors] face a choice: allow themselves to be coerced into agreeing to whatever a union demands in exchange for the required labor peace agreement, or abandon its mission of providing crucial employment opportunities for those experiencing disabilities.”
The state Department of Administrative Services, which oversees Oregon Forward, tells WW that five of the program’s 30 contractors currently have contracts with the city of Portland—and four of the contracts are in industries for which the city mandates labor peace agreements. Only one of those companies is unionized.
DAS declined to comment on the implications of the city’s policy, citing pending litigation.
City commissioners defend the policy but did not respond to questions regarding GardaWorld’s track record or the pending DePaul litigation.
During contract negotiations between the city and Clean and Safe, Commissioner Carmen Rubio insisted Clean and Safe contractors adhere to the city’s procurement policy.
She tells WW she stands by the policy.
“As a city, we should enact policies and contracts that advance an equitable, sustainable economy that is consistent with our values,” Rubio says. “Before I took office, city leaders created sustainable procurement and fair wage policies in line with those values, and my office fought to ensure the Clean and Safe contract adhered to those.”
Ethan Johanson contributed reporting to this story.
Coming in Hot
Come Aug. 1, an international security company called GardaWorld—with corporate headquarters in Montreal and valued at $3 billion to $4 billion—is set to take over security guard duties in downtown Portland.
The company comes with significant legal and public relations baggage.
In March, The Atlanta-Journal Constitution reported that a whistleblower at Garda facilities in Georgia alleged the company had lied about the training qualifications of nearly 100 guards sent to Afghanistan.
In October 2020, the Tampa Bay Times reported GardaWorld had lost millions of dollars in its vaults belonging to banks and that at least 19 people had been killed in Garda crashes since 2008, 12 “because of a Garda truck’s mechanical failure or a mistake by a Garda driver.”
The U.S. Department of Transportation visited its corporate offices and reported “breakdowns” in the company’s safety protocols in 2013. At least two class action lawsuits have been filed against the company by former employees alleging wage violations.
Garda has also faced troubles here.
A 2017 lawsuit filed in Multnomah County against Garda CL Northwest alleged discriminaton based on sexual orientation and subsequent whistleblower retaliation by Garda. It ended in a stipulated settlement.
Four cases in Oregon have been lodged in federal court against Garda.
A 2019 lawsuit in Douglas County alleged that when two employees warned management of problems with truck safety, including broken-down and smoking trucks, employees sitting on buckets in trucks, and being forced to drive trucks with flat tires, they were retaliated against and fired. The lawsuit moved to federal court and ended in a settlement.
In February 2016, the Oregon Bureau of Labor and Industries sent Garda a warning letter, explaining it had reason to suspect the company was not offering required meal and rest breaks for its employees, nor was it paying all wages due.
Later that year, BOLI demanded that Garda pay a former employee just shy of $3,000 in penalty wages.
And in 2019, Garda paid BOLI $100,000 in civil penalties in a settlement over sick leave violations. (That was lowered from a pre-settlement fine of $455,000.)
Clean and Safe tells WW in a statement it “stands proudly” behind awarding the contract to Garda to abide by the city’s contractor policy.
“[We have] recently made a determination and provided a notice of intent to award GardaWorld the public safety program contract,” the statement reads. “[We] strive to have the highest level of transparency and welcome review, oversight and accountability of our security vendor and operations in the state.”
City officials tell WW that Garda CL Northwest provided armored truck services for the city between 2009 and 2013. It did not say why Garda no longer contracts with the city.