CITATIONS

[i]

“It is the mission, duty and purpose of The DPI Group, Inc. (“DPI” or “The DPI Group”) to serve as a management and holding co. for our various non-profits, all with a similar mission of providing work opportunities for individuals with disabilities.”

DPI Group Inc. IRS Form 990 (2020), downloaded from https://employee.thedpigroup.com/tax-compliance (linked from https://thedpigroup.com/who-we-are/faq/), August 5, 2022

[ii]

Snell & Wilmer
1455 SW BROADWAY, SUITE 1750
PORTLAND, OR 97201
503.624.6800 P
503.624.6888 F
ALBUQUERQUE BOISE DENVER LAS VEGAS LOS ANGELES LOS CABOS ORANGE COUNTY
PHOENIX PORTLAND RENO SALT LAKE CITY SAN DIEGO SEATTLE TUCSON WASHINGTON, D.C.

Clifford S Davidson
(503) 443-6099
csdavidson@swlaw.com
November 5, 2021

BY EMAIL AND USPS
Commissioner Jo Ann Hardesty
City of Portland
1221 SW 4th Ave Ste 230
Portland, Oregon 97204

Re: Labor Peace procurement requirement; effect on Oregon Forward contractors serving persons with disabilities

Dear Commissioner Hardesty:

I hope all is well with you. You might remember me; we spoke together on a police practices panel hosted by Western States Center shortly after I helped Western States Center obtain an injunction against Homeland Security last summer.

I write on behalf of another client, Northwest Success. The City of Portland has contracted with Northwest Success to provide janitorial services. Northwest Success is an Oregon Forward contractor and non-profit. As you might be aware, Oregon Forward1 is a statewide program, administered by the Department of Administrative Services (DAS), designed to create a continuous market for goods and services manufactured and provided by persons experiencing disabilities that otherwise might be barriers to employment. DAS certifies Oregon Forward contractors to provide certain goods or services in each county. Where a public agency wishes to procure a good or service on the DAS Oregon Forward procurement list, the public agency must do so through a certified Oregon Forward contractor if one is available in that public agency’s county. Oregon Forward organizations, such as Northwest Success and its parent company, DPI Services, also provide job coaching and counseling related to the specific disabilities its employees are experiencing. For more information on the Oregon Forward program, please visit https://www.oregon.gov/das/Procurement/Pages/oregonforward.aspx.

Recently, your office, in coordination with the Mayor, worked hard to enact Resolution No. 37483, which added a Labor Peace requirement to the City’s Sustainable Procurement Policy. 1 You might know Oregon Forward by its former name, the Qualified Rehabilitation Facility (QRF) Program.

https://efiles.portlandoregon.gov/record/13584396/file/document?_ga=2.185442729.1082418580.1635971841-1664242226.1625679674, p. 21. The Labor Peace policy applies solely to “janitorial, security and industrial laundry service contracts,” and requires, as a condition of contracting, that contractors enter into a labor peace agreement with a labor organization. It is understandable that the City would be concerned with union-initiated work stoppages and with working conditions. Unfortunately, the Labor Peace requirement is inconsistent, and incompatible, with the Oregon Forward program and its goal of creating a statewide, continuous market for goods made, and services performed, by persons experiencing disabilities.

To begin, DAS sets the prices that Oregon Forward contractors may charge to the City (and to other public agencies) and permits a minimal allocation to overhead. The purpose of setting a (low) price is to provide an incentive to public agencies, such as the City, to contract with organizations supporting the employment and rehabilitation of the disabled. That’s the trade-off: mandatory use of Oregon Forward contractors by public agencies in exchange for reasonable pricing. To the extent a union becomes involved and increases labor costs, that would disrupt the statewide Oregon Forward program and individual contractors’ business model. The process of collective bargaining itself also would eat into the very limited overhead Oregon Forward contractors are permitted by DAS to charge on their contracts.

Further, Oregon Forward contractors often already pay above-market rates to their employees. For example, under its contracts with the City, Northwest Success pays $18 or $17.25 per hour to its janitors. Given the rehabilitative nature of Oregon Forward contractors, and the types of disabilities those contractors’ employees might have, there are potential capacity issues related to labor organizing campaigns and voting. Relatedly, the National Labor Relations Act does not apply to “rehabilitative employees” such as those in the employ of Northwest Success.
See Goodwill Indus. of S. Cal., 231 NLRB 536, 538 (1977); see also Goodwill Indus of Denver, 304 NLRB 764, 765-66 (1991).

Last but not least, the additional requirements the City purports to impose on Oregon Forward contractors likely are preempted by state laws, and DAS regulations, governing the Oregon Forward Program.

Northwest Success greatly would appreciate the opportunity to meet with you at your earliest convenience. Neither Northwest Success, nor apparently any other Oregon Forward contractor or Oregon Forward Program representative from DAS, was invited to participate in the discussions that your Policy Director, Derek Bradley, had with SEIU in October 2019. Northwest Success is somewhat concerned about this earlier lack of transparency and engagement—given that Oregon Forward contractors, including Northwest Success’ affiliates, have been performing work for the City for decades.

Northwest Success also would like clarity as to whether or not the City is adopting an official policy that its contractors should be unionized. We have seen conflicting information. The Labor Peace policy states:

“Nothing in this section requires a contract or subcontractor to recognize a particular labor organization or [to collectively bargain] . . . [n]or is this section intended to enact or express any generally applicable policy regarding labor/management relations, or to regulate those relations in any way, or to provide a preference for any outcome in the determination of employee preference regarding union representation.”

The City likely included this language in an effort to avoid preemption under the National Labor Relations Act. See Bldg. & Constr. Trades Council of the Metro. Dist. v. Associated Builders & Contractors of Mass./R.I., Inc. (Boston Harbor), 507 U.S. 218 (1993).

However, the few public records we have seen indicate that the City’s intention is to regulate labor relations by creating inroads for unions (while also publicly disavowing such intent). Please see the “Here are the notes from Derek’s debrief” section, below:

Based on public records such as the foregoing, the purpose of the Labor Peace ordinance appears not to be to address a specific proprietary problem but instead to perpetuate a general policy regarding labor relations and regulate the same. Similar measures have been found to be preempted. See Metropolitan Milwaukee Association of Commerce v. Milwaukee County, 431 F.3d 277 (7th Cir. 2005).

We look forward to working with you, and whomever else you think might be helpful, to promptly address these concerns regarding the intersection between the Labor Peace policy and the Oregon Forward Program. This issue is not academic; SEIU has already approached my client.

Very truly yours,

Snell & Wilmer
Clifford S Davidson
cc: Darvin Pierce
Coordinator, Oregon Forward, Department of Administrative Services
Darvin.PIERCE@oregon.gov
4857-1372-1602

[iii]

"An OFC’s mission must include providing vocational services that enable employment opportunities for individuals with disabilities.” https://www.oregon.gov/das/OPM/Pages/OregonForward.aspx
“The DPI Group Impact: FY 2021” (Graphic), downloaded from https://thedpigroup.com/impact/, 2/24/22