Utah lawmakers pass bill that could jeopardize millions in federal transit funds

The bill stands to strip collective bargaining rights from some UTA employees.

(Trent Nelson | The Salt Lake Tribune) Utah Transit Authority headquarters in Salt Lake City on Wednesday, March 8, 2023. Utah lawmakers passed a bill last month that would strip collective bargaining rights from some Utah Transit Authority employees, an action that potentially jeopardizes millions of dollars in future federal grant funding for the transit agency, transit union members say.

Utah lawmakers passed a bill last month that would strip collective bargaining rights from some Utah Transit Authority employees, an action that potentially jeopardizes millions of dollars in future federal grant funding for the transit agency, transit union members say.

The measure, HB243, stands to exclude certain UTA managers and supervisors from the state definition of a public transit employee, effectively removing their right to join or form a labor organization, according to the bill’s text. The agency itself brought the issue forward to Rep. Jon Hawkins, R-Pleasant Grove, who sponsored the bill.

The bill would only affect new UTA managers and supervisors because it would not be retroactive, Utah assistant attorney general Tim Merrell, while acting as legal counsel for UTA, said. According to Merrell’s testimony, 1,642 UTA supervisors and managers are currently involved in unions.

Explaining the motivation for the move, Merrell said groups of managerial employees could have a conflict of interest if they were able to collectively bargain since they have access to confidential information.

But Teamsters Local 222, which represents 42 UTA operations supervisors, argues that the bill defies a portion of the Federal Transit Act, which requires protections for transit employees if a transit agency receives federal funding.

“This is just a direct attack on the employees at UTA,” said Spencer Hogue, secretary treasurer for Teamsters Local 222.

While arguing for its passage during a Feb. 2 committee hearing, Utah attorney general’s office lawyer David Wilkins, also representing UTA, said that the bill would align Utah law with federal law, which he said does not allow for supervisors to unionize.

Although Wilkins did not cite a specific federal statute, Rep. Ashlee Matthews, D-West Jordan, said during a hearing that the lawmakers seemed to be referring to 1947′s Taft-Hartley Act, which updated federal statute to exclude supervisors from the federal definition of employees who are permitted to participate in bargaining units.

When the Taft-Hartley Act was passed, however, Utah did not update its own definition of such employees, Matthews said, and hasn’t done so since then.

Almost 20 years after that act passed, the subsequent Urban Mass Transportation Act of 1964 froze state protections of transit employee labor rights, Matthews pointed out, arguing that since Utah had not excluded supervisors from its original definition of employees who are permitted to collectively bargain, those employees’ organizing rights remain protected by the act’s guidelines.

Wilkins disagreed with Matthews “read on the law,” asserting that the Urban Mass Transportation Act preserves labor rights of the private companies an agency may buy — and since UTA’s predecessor companies were privately-owned, and their supervisory employees did not unionize, the legislation would not risk UTA’s federal grant funds.

“This sounds like a dangerous game of chicken that I would not like to play,” Matthews said. “To me, this is not a good policy, and it’s not something I think it’s worth the Legislature playing around with.”

Department of Labor warns UTA could lose future grants

In a letter sent to the Utah House of Representatives on Feb. 15, the director of the Department of Labor warned lawmakers that any law that “removed or diminished any transit employees’ collective bargaining rights” would raise “serious concerns” with the federal agency’s ability to certify grant applications for UTA.

Without these certifications, federal grant funds could not be awarded to UTA in the future. By comparison, the agency was awarded over $224 million of such funds in 2022, the letter states.

A UTA spokesperson said that, at the time the letter was written, the Labor Department was not aware that UTA currently has an agreement with the Teamsters bargaining unit that represents 42 UTA operations supervisors, and the Labor Department was not aware that the proposed Utah statute would not be retroactive.

However, a portion of the Federal Transit Act requires continuous preservation of employees’ collective bargaining rights, which covers future employees as well, Tracy Olson, a Utah attorney with expertise in labor and transit law, said.

Olson also pointed to two court cases that the Labor Department cited in its letter to the Legislature, both of which affirmed that states have the right to pass laws like HB243 — but that they won’t continue to have the privilege of receiving federal funds if those laws violate the Federal Transit Act.

“What’s happened in the past is that labor unions have basically blocked the release of federal funds because the public transportation entity is not abiding by the rules that are required,” Olson said. “These are the terms that Congress made for you to be able to receive these funds; you don’t do these things, you don’t receive these funds.”

The Labor Department is required to certify that transit employee protections are in place — and meet federal requirements — before the Federal Transit Administration can release grant funds.

The Labor Department can withhold such certification if Utah’s legal circumstances become inconsistent with federal statute, a spokesperson for the agency said in an email. The agency’s Office of Labor-Management Standards is in contact with the state regarding the proposed bill.

The Labor Department spokesperson noted that should Gov. Spencer Cox sign the bill into law — and should UTA then submit a federal grant application in the future — UTA and its service unions would then have 15 days to raise any concerns about the new legislation, which would need to be considered before a grant’s certification.

A spokesperson for UTA said the agency “would never act in a way to endanger its federal funding,” adding that UTA “has been in communication with its federal partners at the Federal Transit Administration about HB243 since the start.”

According to UTA, the 15-day challenge period that the Labor Department cited is “the beginning of the process,” and the federal agency could issue interim certification of grant funds while UTA and transit unions are ordered to negotiate.

If the parties are unable to come to an agreement, a judge could set parameters that UTA must meet in order to acquire federal funding, “all while UTA receives funding under interim certification,” the UTA spokesperson said in an email.

“I’m not familiar with the process that they’re talking about,” Olson said. “This whole ‘after the fact’; ‘Oh, it’s not going to affect it, they’re going to provisionally release the money’ — that’s not what the statute says. ... Because the thing is, the cases have said: That doesn’t happen until the certification happens. They’re not allowed to bypass that.”

Utah legislators passed the bill on Feb. 16. As of Wednesday, Cox had not signed it into law. A spokesperson from his office declined to comment on the legislation.