The New Jersey Business & Industry Association is urging lawmakers in the Senate and Assembly today to vote against concurrence on a bill that would mandate labor harmony agreements for certain retail and distribution center projects.

Gov. Phil Murphy conditionally vetoed bill A-4630 last month to recommend that the minimum employee threshold for retail establishments be increased from 10 employees to 20 employees.

But even with that minor change, the legislation would still greatly raise costs for owners and tenants and discourage others from pursuing such projects.

“This bill brings no redeeming value to small and main street businesses, which already have enough burdens to deal with in this state,” said NJBIA Chief Government Affairs Officer Chrissy Buteas. “Labor harmony agreements unnecessarily interfere with employer/employee relationships, seek to balance labor negotiations in one direction and unequivocally drive up the cost of projects.

“Even in his conditional veto statement, Governor Murphy acknowledges the impacts this bill could have on ‘small businesses that drive New Jersey’s economy.’ But increasing the minimum employee threshold to only 20 employees in the revised bill still brings in far too many small and main street businesses – most of which unionization is not a consideration.

“We urge our lawmakers to not vote for concurrence on the conditional veto of this bill, not bring more pain upon small businesses, and work collaboratively toward a fairer bill in a future session,” Buteas said.

Under the bill, contractors and subcontractors will be required to enter into labor harmony agreements for a period of no less than five years if they wish to work on qualifying projects.

The actual labor harmony agreements, however, do not apply to the construction stage of the project. They only apply to the retail and distribution operations of the subsequent occupants of the buildings.

The New Jersey Business Coalition – featuring more than 80 leading business and nonprofit groups, recently urged lawmakers to not vote for concurrence on the bill. The coalition detailed the following impacts if the bill is enacted in its current form: Distribution centers that provide hundreds of jobs and opportunities for career advancement for New Jerseyans may choose to build in neighboring states or move their operations when it comes time to renegotiate agreements with the state or other public entities in order to maintain lower operating costs.

Main Street entrepreneurs seeking to open a retail establishment would have to contend with collective bargaining demands if they receive any public financial incentives as they get their business off the ground. 

Redevelopment projects seeking to revitalize abandoned shopping centers or other under-utilized spaces will struggle to attract new tenants willing to contend with yet another costly labor mandate. “Imagine a small clothing store with 20 employees in an Urban Enterprise Zone needing to comply with a labor harmony mandate,” Buteas said. “That’s just one unfortunate scenario that unfolds under this bill. It literally sets a precedent that does not exist anywhere else in the country.

“We ask our policymakers to fully understand the ramifications of this bill and who actually benefits from it. We ask them to not concur with this bill. Put simply, a “yes” vote here is another hit on small business, a hit on jobs and a hit on New Jersey’s competitiveness,” Buteas said.