1 E1STUNIC 1 2 3 4 Plaintiff, 5 v. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C.

(212) 805-0300 REVIEW OFFICER BY: DENNIS WALSH Review Officer - and MINTZ LEVIN Attorneys for Review Officer BY: BRIDGET ROHDE PREET BHARARA United States Attorney for the Southern District of New York BY: TARA LaMORTE Assistant United States Attorney APPEARANCES HON. RICHARD M. BERMAN, District Judge Before: Defendants. ------------------------------x New York, N.Y. January 28, 2014 9:30 a.m. DISTRICT COUNCIL OF NEW YORK CITY and VICINITY OF THE UNITED BROTHERHOOD OF CARPENTERS and JOINERS OF AMERICA, et al., 90 Civ. 5722 (RMB) UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES OF AMERICA,

2 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 ALSO PRESENT: 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 JOSEPH GEIGER, EST KAUFF McGUIRE & MARGOLIS LLP Attorneys for District Council Fringe Benefit Funds BY: RAYMOND G. McGUIRE HOLLAND & KNIGHT Attorneys for Building Contractors Association BY: LOREN L. FORREST JR. McELROY, DEUTSCH, MULVANEY & CARPENTER Attorneys for Wall Ceiling Association BY: MARK A. ROSEN APPEARANCES CONTINUED ZUCKERMAN SPAEDER Attorneys for District Council BY: BARBARA JONES SPIVAK LIPTON Attorneys for District Council BY: JAMES MURPHY ADRIAN HEALY

3 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 margin. process? EST. (In open court) THE COURT: Is he here? MR. GEIGER: THE COURT: MR. GEIGER: THE COURT: Yes, your Honor. Congratulations. Thank you. And how was the vote? What was the So first off, congratulations to the new

Did you win by. MR. GEIGER: It was slightly more than a two-to-one

The vote was held Friday, and the votes were tallied

on Friday. THE COURT: MR. GEIGER: THE COURT: Nice to have you here. Thank you. So I received a letter from Judge Jones What I would

yesterday evening or so, and it's very helpful.

like to do today is deal with these -- the following issues in the following order. First, in Judge Jones' letter she raises at the end of the letter this issue about international agreements, and frankly, I would like to hear about that first. I'm curious as So

to know what that's about and where that's leading us.

perhaps on that issue I might hear from Mr. Walsh and also then the district council and anybody else that wants to add anything to that. like to hear about. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 So that would be the first thing I would

4 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CBAs. The second I would like to talk about the two pending I'm aware that they had -- you are too, that they had

been earlier submitted but never acted upon by me, and that is because of my concern that they contain provisions that -- this may be too strong, but on their face are not being complied with. That's the whole point of the other discussion that

we're having here is that the so-called anti-fraud provisions in all the CBAs do not appear to be -- well, that may be too strong, but you understand my point about that. It's kind of

odd to go forward and approve an agreement, which I probably would not have done incidentally historically had I known at the time that the provisions that are mandatory in the agreements, they use the word "shall," were not or could not or were not adequately being complied with. second issue. Then I would like to talk about the proposed new amendment of the stipulation and order, what that's about, why people feel that's important and necessary, then to talk about the status of electronic reporting. I did note that one of the That would be the

consultant, I don't know if that's what it's called, that District Council retained, one of its early recommendations was that there be in-house IT capability. That's something that I

have been thinking about and talking about for several months now, and frankly I have been surprised that that issue hadn't been taken care of a long time ago. But anyway, I'm all for

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5 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 today? Not the RO Walsh, but -- well, maybe that issue will not be pursued, but we'll see. So yeah, with that in mind, then of course we can hear about if anybody has any other issues that they want to discuss. So let's hear about this, Mr. Walsh, if we might, this international agreements issue. It's somewhat of a concern to that. And then we can talk more about electronic reporting,

where that stands. And then there's an issue about Mr. Walsh. Is he here

me because it suggests, at least from Judge Jones' letter that -- maybe this is too strong, but somebody is trying to evade the terms and conditions of the collective bargaining agreement, at least in spirit, and that is a problem, in my opinion. MR. WALSH: Judge, Dennis Walsh, the review officer.

The issue surfaced within the past few weeks, and there's been much discussion between the District Council and at first the Wall Ceiling Association and their counsel. attended one of the early meetings where District Council forcefully articulated its position that there are genuine compliance issues, and others are not fully satisfied, that there has not been some intention on the part of the Wall Ceiling Association, and perhaps a couple of the other SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 I

6 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 associates, to evade certain aspects of the requirements, the compliance requirements, approved by this Court in their substantive agreements. And my position that I articulated at that meeting and to others has been that I think on the pure economics, I don't particularly have any interest, and I don't think the Court does either, I certainly don't pretend to speak for the Court. But on the compliance issue I have a very strong interest, as surely does the Court, and if there has been any intention to avoid any aspect of the compliance by holding these international agreements in reserve for these small jobs, these one-man and two-man jobs, then I think it's a fair question for further inquiry. THE COURT: So you might, just so the record is clear,

just briefly describe what the issue is, so to speak, that is presented. MR. WALSH: I would certainly yield to Judge Jones and

Jim Murphy on the particulars of the discussion, but as I understand it -- and these international agreements have been used for years. There have always been international The singular

agreements on these one- and two-man jobs.

difference now is that we have associations that participated in collective bargaining on the large agreements, I will call them. THE COURT: The ones that have been approved.

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7 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. WALSH: Right. With very specific compliance And I think there's a

components, the electronic reporting.

fair argument that the provision, the so-called matching provision where you bring in a member of another union not affiliated with District Council into the New York City jurisdiction, then he or she must be matched with someone from the District Council out-of-work list. Certainly the

government has always had the position that there is a compliance benefit to having a New York City carpenter who is a member of a local union affiliated with the District Council on a job, so that if there is any misreporting or under reporting or any shenanigans whatsoever on the job, then the New York member would have an interest in reporting it. So as I understand it, there have been a couple of grievances filed. I don't think that the issue is quite ripe

yet as far as this Court is concerned, but I think it was a very important thing for the District Council to point out should any signatory contract who is a party to one of the contracts approved by this Court have the intention to enter into an international agreement with the intention of avoiding the compliance components from the large contract. I will

certainly yield to Judge Jones and Jim Murphy if I left anything out or they want to refine what I said. THE COURT: So there's a point when compliance

provisions wouldn't apply to any international contract? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

8 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. WALSH: I do want to clarify. The head of the

Wall Ceiling Association did say they would, without any question, comply with the electronic reporting, but I think there's a fair question as to how that would happen if the intention of the contractor is to use two non-New York City members. And as the District Council and Judge Jones pointed

out in their letter that the Court received yesterday, they would not be able to completely rely on reporting from some person who is not a member of a local union here in New York City. THE COURT: counsel here today? MR. ROSEN: THE COURT: MR. ROSEN: Yes. Maybe we should hear from him and then -Good morning, your Honor, Mark Rosen from Do we have -- I thought I saw Wall Ceiling

McElroy, Deutsch, Mulvaney & Carpenter. THE COURT: MR. ROSEN: Association. THE COURT: And maybe if you could restate your name I think you better slow down. Attorney for the Wall & Ceiling

and the name of your firm. MR. ROSEN: Carpenter. Your Honor, let me start by addressing this contention that there's been some attempt to evade the provisions of the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 Mark Rosen, McElroy, Deutsch, Mulvaney &

9 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 collective bargaining agreement that was approved by this Court. As the review officer has noted, these international agreements have been in place literally forever, and their intent is to allow union contractors in Long Island, Westchester, to bring their union carpenters, who are members of other locals of the international, sister locals, if you will, into the five boroughs to perform work. And they provide

the provisions of how the benefits are paid, reallocated, and all that. That has been in effect forever.

Then last year a new collective bargaining agreement was reached between Wall & Ceiling and the District Council and it was in effect. At that time there was an international And there was no discussion in the

agreement in effect.

negotiations that the collective bargaining agreement was going to preempt the international or affect the international in any way. I think what's at issue is that in the new collective

bargaining agreement there's a provision for a two-man job which could be worked without a steward designated by the District Council. So there's been no attempt to evade.

In June of this year, a month after this Court approved the collective bargaining agreement, the Wall & Ceiling Association included an agreement with the international. unilaterally. This is not something that has been done The agreement was negotiated, approved and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

10 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 signed with the union's international, a new international agreement in June. We don't believe that there's a conflict.

We believe that under the international constitution this agreement is proper, these international agreements are recognized throughout the country. THE COURT: Nobody is disputing any of that. So the

dispute is what are the implications for the provisions of the collective bargaining agreement, in particular, the electronic reporting for the international agreements. MR. ROSEN: As the review officer pointed out, we had

a meeting at the District Council where the head of the association confirmed unequivocally that the association is willing to have the anti-corruption and compliance provision apply to any job invoked under the international. This other logistical concern that's being raised in Judge Jones' letter about how it's going to work, quite frankly I think there has to be some discussion on that. Historically,

again, jobs were called into the union under the international. They were assigned a job number, time was reported, benefits were paid. difficulty. THE COURT: So you think that the electronic reporting I don't know why this is now going to be such a big

features will, A, apply, and B, be usable in the context of these international agreements? MR. ROSEN: That's what I'm hearing.

The association has committed they will

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11 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 apply. Usable gets into the technology, but we will cooperate

to make sure that they are. THE COURT: MR. MURPHY: District Council. If I may, your Honor, just briefly give a history or chronology of this. THE COURT: Don't go back too far. He said they have Okay. James M. Murphy, Spivak Lipton, for the

been in place forever. MR. MURPHY: On July 25th, 2012, the executive

director of Wall Ceiling addressed the delegate body because they were in negotiations with the District Council for full mobility. And one of the things that he tried to get the

delegates to agree to the full mobility and the other provisions, he said: What does the two-man job without a shop It keeps New York City carpenters

steward, what does that do?

working the two man and out-of-towners can't work the two-man job. It's got to be a New York City District Council In addition to that, it eliminates for the need for

carpenter.

someone to use an international agreement where he comes in with two guys from out of town and there are no New York City carpenters working on that job. On August 22nd -THE COURT: MR. MURPHY: I don't really get it. What I think he was saying is that by

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12 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreeing to the new agreement between the District Council and the Wall Ceiling Association, there would be no need for Wall Ceiling Association members to invoke an international agreement. In the past, one- and two-man jobs were not covered under the District Council's agreement of Wall Ceiling, so this was one of the concessions they made with the one-to-one matching, which effectively meant you always would have on a two-person job two District Council members, because no contractor is going to have to do the matching of four people on a two-person job. The deal was done on August 22nd, 2012. As your

Honor, I think in retrospect correctly, pointed out that the best practices were to going to be to reduce the deal to a collective bargaining agreement, that was done in March of 2013, was submitted to the Court, the Court allowed for an open comment period and then issued an order on May 8, 2013 approving the collective bargaining agreement, including the electronic reporting and anti-corruption compliance procedures. It wasn't until August of 2013 that the Wall Ceiling and the UBC executed this agreement, and then recently during the fall has had New York City Wall Ceiling Association members attempting to use the agreement. The District Council's position is this subverts the economics of the New York City District Council/Wall Ceiling SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

13 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreement, and also subverts the anti-corruption compliance because on these jobs with the international there will not be District Council members, it will be people from out of town and from other UBC locals. THE COURT: That's our position.

Strikes me, unless I'm missing something, One is you're suggesting there's

there's two different issues.

a conflict between the basic CBAs and these international agreements as an economic matter, the other is the issue raised by Judge Jones whether the provisions of the CBAs apply to those international situations. MR. MURPHY: THE COURT: no problem, right? Yes, sir. So Mr. Rosen is saying as to the latter, They do apply, we'll work it out, Am I getting that right?

anti-corruption provisions, and how they apply we'll work it out. But the broader issue that you're raising is -- I'm not

sure how that gets resolved, but it doesn't appear to be the issue that is presented to me. MR. MURPHY: We understand the Court's order from

May 8 was approving the entire collective bargaining agreement with Wall Ceiling as that also included the anti-corruption compliance. THE COURT: MR. MURPHY: There's no question about that. And that we don't believe that Wall

Ceiling can then essentially a year later pick and choose what provisions that it's going to use, whether it implicates the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

14 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 economics of it, and we think it also implicates the anti-corruption compliance. We have no idea with these

international agreements how the anti-corruption compliance and the electronic reporting would be done. As your Honor is well aware, we have been making our best efforts with the Wall Ceiling/District Council CBA as well as the subsequently approved CBAs to make sure that the anti-corruption compliance and electronic reporting is working. And now this adds -- seems to add and sort of foists upon the District Council a chore that it never took up in collective bargaining with its employer associations. THE COURT: MS. JONES: I get the issues, so to speak. Judge, all I wanted to say was obviously

if we cannot work something out with Wall Ceiling with respect to anti-corruption measures, that would be something we would immediately bring to the Court's attention. THE COURT: Very clearly it sounds like Mr. Rosen is

saying that, A, they apply, and B, he's willing to work it out. MS. JONES: They have conceded they applied, so we

need to work something out. With respect to whether or not there's -- using these internationals violates the CBA itself, we didn't want to end up in an arbitration without advising your Honor that that was coming. THE COURT: So how does that -- that plays out in

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15 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 arbitration? MS. JONES: It will. We expect to be in arbitration

with Wall Ceiling, from our discussions with them, on this very issue. THE COURT: MR. MURPHY: And that is provided for where? It's in the District Council/Wall Ceiling

collective bargaining agreement if there's any disputes between the parties. THE COURT: Mr. Rosen? MR. ROSEN: Your Honor, sorry, but I need to address Mr. Murphy I got it.

one thing on the record in defense of my client.

read a statement that our president -- our managing director Mr. Delollis allegedly made in some meeting. reference before. We heard that We

I don't know what he's reading from. Mr. Delollis asked for the

asked for the transcript.

transcript because we believes the statement is being taken out of context, and we have never been provided one. So if that's

something available, we would like a transcript so Mr. Delollis can explain it. THE COURT: That's certainly fair, but I'm sure you'll

work that out between the two of you. MR. FORREST: Loren Forrest from Holland & Knight for

the Building Contractors Association. To the extent it affects our association, it's not SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

16 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 directly implicated -THE COURT: MR. FORREST: To what extent could it be? Just there are some individual members

of the BCA who do have these agreements with international, but the BCA did not negotiate nor sign, is not a party to those agreements, so just on behalf of our client I wanted to distinguish ourselves from the Wall & Ceiling Association and state that we obviously work with Judge Jones and Mr. Murphy if there's any issues implicating the BCA. THE COURT: You're distinguished by the fact you're

not the Wall & Ceiling Association. MR. FORREST: It was just the District Council has

taken the position with regard to some of the individual members that international agreements may present problems for them, and there have been grievances about those issues. wanted to disclose that to the Court. THE COURT: CBAs, Mr. Walsh. Thank you. I

So now if we could turn to two pending

And first, if you would, what is your view

about -- and I intentionally did not go forward because we were waiting to make more progress with respect to the compliance with the electronic reporting, so I don't exactly know how that fits with these two outstanding CBAs. MR. WALSH: Judge, it seems to me that we are

unavoidably stuck with a certain reality that the District Council has developed a system which has been described in the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

17 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 various 30-day reports to address what are technological deficiencies. I had many discussions with counsel for the

union, with the government, three-way discussions, and it seems to me -- and I have articulated this position, these 30-day reports have become too complicated. They are too much of an

exercise in advocacy, that simply what we all need to know is how many hours have been worked in a given period, and within 72 hours from the completion of that work, how much of that time has been entered into a system that's reliable. THE COURT: Well, and when you say "reliable," you We had this whole

also mean accessible by individual.

discussion about the one big aspect of this system was so that they would be able to independently check and see hours reflected. MR. WALSH: And that feature is the sole basis why my

office and the government signed off, and I assume the Court, that if they can do this, if the rank and file can log on and see the time, it is a singular advancement in anti-racketeering and anti-fraud. THE COURT: What you're saying is accurate, that was

very important in my determination whether or not to approve those changes. MR. WALSH: So when the District Council concludes in

its most recent report and in Judge Jones' letter of yesterday they're at 98 percent, I'm not quite sure what that means. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

18 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Judge. And I keep thinking about a statement that I made in the fourth report a couple of years ago, it's on page 24, where we reported that only 75 percent of the time actually work was being captured by the paper steward report system. There was

6.2 million hours over and above that that the contractors themselves remitted to the Benefit Funds in raw man hours. And this ties into the other question that I think is very important in my mind, which is the complete turn over of all time entry into some reliable electronic format. I think

right now they have about 60 percent of the work that's subject to the Court-approved CBAs, but there's another key 40 percent that still is relying on this terrible paper steward report system. And although the District Council recognized the need

to move forward, we don't have a date certain or a target date even for when all time must be entered into the electronic system so that we can get the benefits of this member oversight. THE COURT: As practical matter, at the present time

does the 60 percent cover these two agreements or are these two agreements are outside the 60 percent? MR. WALSH: I don't know the answer to that question,

I think they are not very broad in scope, not that they

are immaterial, but they certainly don't compare to what the Court has already approved in substance and volume. So I think the real question is what can be done to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

19 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 accelerate the process of getting a real technological cure for these problems that this six-person team is engaging in certain fixes, but I think there is an open question as to how reliable it is. And I would like to know if there's something that

could be done to really accelerate the technological fix here. And certainly Segal's recommendation that an on-site IT person be in place is something that you and I have been talking about for many months. It was obvious to Segal that I would hope there's some

was something that had to be done.

qualified person or a couple of people that the District Council could hire that could focus their intellect and experience and training in improving the reliability of the system that they have now rather than having to wait many, many months, over a year, until this RFP that Segal is developing is actually going to bear fruit by hiring some national vendor coming in and fixing all the hardware and updating the software, which is really so far down the road, I think it makes the question of what could be done in the interim an imperative, and only the District Council can adequately respond to that. view. THE COURT: District Council. So I agree with you. Let's hear from the It's a question of resources and will, in my

We'll move then to the status of this

electronic reporting. MR. MURPHY: Judge, the two collective bargaining

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20 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreements in front of you are with the Association of Concrete Contractors of New York, which covers Nassau and Suffolk Counties. The total hours for those two associations with

respect to the District Council is approximately maybe 200,000 hours a year compared to 16, 18 million hours a year. One of them is close to the GCA Heavy Construction Carpenters contract, and the other one is for the structural concrete, which is close to the Cement League, which is here in the New York collective bargaining agreement, just to give you some background. THE COURT: I get it, but the real question is -- the

legal question is is there an inconsistency in approving those agreements which contained clauses in them which we are all here, and have been for months, arguing -- or not arguing, but discussing whether those are being complied with or can be now or 14 from now. I foresee. MR. MURPHY: THE COURT: MR. MURPHY: THE COURT: MR. MURPHY: Right. So what do you think as to that? Excuse me, your Honor? What do you think about that? I think it's an ongoing issue that the That's the theoretical problem with them that

District Council has been wrestling with, and that's why we have the Segal company in. That's why we're going to end up

hiring an on-site IT person. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

21 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: I get all that, but do you see any

inconsistency with approving agreements which contain provisions that you know are an ongoing problem but are not, as the provisions provide, "shall," are not and won't be implemented? MS. JONES: Judge, we think that we are complying with When we first took a

reporting within 72 hours at 98 percent.

look at the numbers that were provided to the Court in the first couple of months, there were obvious issues. Jobs that

appeared to be open -- and this is what you heard before -were actually jobs that had been closed. And so it looked as

though we were not reporting hours for jobs when in fact there were no hours being worked. We have finally a job closed box, because one of the biggest problems, as I just mentioned, in getting accurate hours is to know that jobs have closed. live. Standard Data did the work on it. That is going to go It's to go through

live on February 15th.

This Wednesday and Thursday the shop

stewards are all being trained on how to use this box. Once the shop stewards are able to electronically close these jobs, that will reduce the number of unreported hours dramatically. And I want to say that it's complicated to

figure out which jobs are still open or closed, which jobs may have been carried even though they hadn't begun yet, and a number of other factors. But in order to try to give your

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22 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor as close to an accurate percentage of compliance as possible -- and for that reason we had to use our person power as opposed to our system, because our system simply cannot tell us what is happening on any given day. We have used it, and we

stand by our numbers, and we think going forward we can achieve the same compliance with the contracts before your Honor now. THE COURT: I get all that. But as Mr. Walsh said, at

least in my mind, at the time of approval of these so-called anti-corruption technology provisions, was the promise that any individual worker, carpenter, could go online and double-check. That was the transparency issue and that was something that I thought was very appealing and very important. And I don't know -- I don't think your 98 percent says that 98 percent of all carpenters can do that with reliability. That's the missing factor, or if it's not missing, I just don't understand where that stands, and that is what I'm interested in seeing. MS. JONES: What we're saying is that 98 percent of

all jobs and the hours for all jobs are going in within that 72 hour framework into Watchdog, and any carpenter can look in there and, at least within the 72 hours framework, check his hours and check the number of people on his crew. THE COURT: February 15? MS. JONES: No, no, no, that's true now, since our That's true now or going to be true after

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23 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 first report to the Court in December when we -- I think we were at -THE COURT: MS. JONES: but it's over 98 now. And again, I can only say if you look at any given day, let's say there were a hundred jobs that were opened, and then you check the job, you find out that on that day it was closed, that could be 20 of those hundred jobs that shouldn't have been there, it could have been ten of those hundred jobs. THE COURT: MS. JONES: I get it. So that's what we have been doing. I 95 percent. -- 95, that's been true. It was 95 then,

regret we don't have a computer system yet that would make it easy for us to track this, but we're prepared to write a simpler exposition of how we're doing this. accurate. But basically it's

It does take people to call up and find out and

verify that the job was closed, for instance, or what the other reasons may have been. And when they discover a job where it

was late beyond the 72 hours, that goes into the percentage that where there's non-compliance. THE COURT: MR. MURPHY: So to me this sounds like -Just to make it clear, your Honor, I

don't think there's ever been an issue since implementation back in the spring of 2013, the first collective bargaining agreement being the Wall Ceiling/District Council agreement SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

24 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that Operation Watchdog wasn't available. THE COURT: MR. MURPHY: Was not available? There's never been an issue with

Operation Watchdog, that members have always been able to get into the portal to check their own jobs. The issue was whether And one

or not the hours and the people were being reported.

of the big issues was with the closed jobs or you had shop stewards who were not compliant with the reporting procedures. But the availability of rank and file workers to get in and to check their own jobs and their own hours has, as far as I know, has never been an issue. So that part, and sort of as the review officer correctly states, that being sort of the lynchpin of this whole anti-corruption compliance where you're going to have the watchdogs of the rank and file members as literally watchdogs of their own jobs, that hasn't been an issue, the issue has been whether or not they're reporting from the shop stewards or the designated reporters on the one- and two-person jobs has actually come in. MS. JONES: And I would just say, your Honor, that --

and I probably said this, but once the job closed box goes into operation and works, we won't need five or six people making phone calls to find out if the job ever existed. It should

greatly reduce the amount of additional person involvement, because that seems to me to be the single biggest reason why SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

25 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 our numbers look like we're not reporting. THE COURT: MR. WALSH: Mr. Walsh? Judge, as I said, I think we are stuck

with the reality that we have got this ad hoc temporary system which reflects I think at best the status quo that counsel can produce. But I reiterate if there's anything else that can be

done before this lengthy process of RFPs and retaining consultants is finished off, if there's anything else that can be done to increase the reliability in an efficient way, that the District Council should do everything in its power to make that happen. THE COURT: MR. WALSH: And what might that be? I think they have got to get these IT

people, their own employees hired, and I think they need to be talented and they need to be well compensated in exchange for that talent and experience. And I think that in addition to

the usual everyday IT things, fixing computer glitches at people's work stations, they can work with any national consultant that is on the scene, and the employee's own counsel, and see what light bulb they can turn on over in situation and see if there's a better way of doing it rather than having this team making these phone calls and looking at these paper printouts to see if there's some way that technology can be brought to bear well in advance of the schedule contemplated by the Council currently. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

26 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: So the issue, Judge Jones, is whether

there can be some acceleration in this fix problem, in this fix scheme. MS. JONES: Well, as I said, I think the job closed In addition, as I know

box is going to take us a long way. your Honor knows, we are going to -THE COURT: MS. JONES: Hire?

Well, yes, we're going to hire, but I was

about to say our EST Pro Tem and our EST Elect are committed to going to the delegate body and recommend a hire, and we'll have it. And I can't overstate the value that we have in our use of

Charles Jackson. THE COURT: MS. JONES: Is that Benefit Funds? From the Funds. But he's been there a

very long time, and he's been extraordinarily helpful, and he's been working with Segal. Believe me, if we can think of anything else quickly with the help of Segal and our own IT person to have less reliance on our business reps making these phone calls and our electronic reporting people working with them, we will do it. I think the job closed box should be very helpful, but I say, again, our numbers are reliable and we're complying. THE COURT: On my agenda the amendment to the

stipulation order proposed, let's hear a little bit about that. MR. WALSH: As I lay out in the letter that I did

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

27 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 write to the Court over a week ago, the local union, the eight local unions -THE COURT: MR. WALSH: We have taken care of the local problem. Well, in sum and substance they have been

compliant with the stipulation order and federal law under 29 USC 501. I think there's a distinction between the locals and the Council not with respect to compliance but right now I am getting notice of expenditures simply as a CC on emails to the delegate body. So I don't really think it accomplishes

anything terms of us being able to assess where the District Council is by saying we'll take the RO off the CC on the email, it doesn't accomplish anything. So what I would like to talk about with counsel for the union is a more meaningful way of assigning responsibility and placing it with the District Council and being able to, on a periodic basis, dive in and see how that's going. Because I

do want to see the District Council take responsibility for its affairs, but simply removing the prior notice on the expenditures is not going to be an adequate test. the discussion that I want to have. THE COURT: MR. WALSH: That's ongoing. Yes, Judge Jones and I and Jim Murphy talk So that's

a couple of times a week at the union. THE COURT: Anybody else want to comment on that?

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

28 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Actually I think that's it for my agenda. anybody want to raise anything else? No? MS. JONES: Well, your Honor, Kevin Segal from -Does

sorry, Kevin Wolf from Segal is here, and I wanted to let your Honor know that he is available. any questions for him. THE COURT: MS. JONES: THE COURT: I don't. Thank you. I don't at this time. And it may be in I don't think that you have

your letter, I know you discussed the topic, when do you think the in-house person -- by the way, I'm not trying to rush it and get the wrong person, I'm trying to speed it up and get the right person. MS. JONES: I have spoken with not just the leadership We're hoping that -- we have a

but our operations director. job description.

Once we have the approval from the delegate We hope that we can interview relatively

body, it will go out.

quickly, as we did for the IT consultant. THE COURT: MS. JONES: That gets posted? We haven't exactly decided how, but I And then if we can do

assume it will be advertised and posted.

it, we would like to try to hire someone by March 1st. MR. WALSH: Judge, a footnote on the whole question of

making electronic all reporting, the District Council either SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

29 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 has to get more tablets paid for by the District Council or going back to the labor management fund and seeing if they will pay for some more. But in the absence of that cooperation from

the LM fund, it seems to me the counsel is on the hook for having to devise some means for the stewards to enter this time electronically, whether on some PC at job site, a home PC, or being provided with an application for cell phones, or buying more tablets out of District Council funds. But that is

something that I do not have a solid answer on, and I have been pushing the Council. I want to reemphasize the vital

importance of the Council coming up with a target being for being a hundred percent electronic. MS. JONES: more tablets. THE COURT: MS. JONES: What's the universe now? I think we have 800 -- we have a thousand, Judge, we estimate we may need 250 to 300

and almost all of them are out, and the hope is that we will be able to get that money from labor management. In terms of the deadline for going paperless, I cannot give you one, but I can give you an update of what we have done so far. THE COURT: You could give me an estimate, too, of So you will have to buy the

when you think you will be there. tablets first or some alternative. MS. JONES:

Right, or some alternative.

And we'll

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30 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 also be able, we think, to reclaim some tablets, but the first thing is to get a large number of tablets, which we can do. THE COURT: MS. JONES: That shouldn't be a big deal. I don't think so. I think configuring

them takes a little while, but we should be able to get them. Then we have discovered a large number of our stewards are using their own cell phones. report directly in. They have a portal they can

We're considering having them return the

tablets they're not using so that we can change those out. THE COURT: MS. JONES: Because the cell phone works equally? It does. As long as you go into the

portal you're communicating electronically with Watchdog just as if you had the tablet. Maybe going forward there will be

easier and less expensive ways for the electronic reporting to be done, but right now for the moment our concern is to get more tablets. 35 percent. So as we go forward converting, I would say it's

We probably have 65 percent electronic right now. So it's another 35 percent? It's another 35 percent. And your target date? Well, I think within the next month we'll

THE COURT: MS. JONES: THE COURT: MS. JONES:

have an answer about whether or not, and probably sooner, we can have our hours from the Javits Center, which I think is about 460,000 hours, electronically transmitted to us. would be a terrific advantage. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 That

31 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 In addition, there is an association, which are the independent outside associations, and they have over a million hours. These are all jobs where we have stewards, many of whom

already have a tablet, they're used to reporting when they work on CBA Court-ordered jobs, and we think we can convert them very quickly. And I could say a month, I don't know, I don't But we're targeting them and targeting

know if that's true. Javits.

And we had a conversation with the General Contractors Association. They have an understanding and agreement with us And we are going to

to cooperate in electronic reporting.

begin to lay out a program with them for the dock builders agreement, which is one of the three GCA agreements that we have. And with the dock builders, there are large jobs that we One

can probably target pretty quickly and use tablets on it.

of them that Mr. Walsh mentioned some time ago as a good target was the Tappan Zee Bridge. Unfortunately they are on hold, I But we're looking for other

guess because of the weather.

large jobs, we're doing it with the GCA as executive director. We're going to talk more next week, and we would like to start getting them tablets and working. We also have a protocol that Mr. Walsh is still considering relating to the dock builders that would permit telephone reporting with some of the dock builders. I think

ultimately we would want all tablet or electronic reporting. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

32 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And that's easier when you have a lot of workers and it's sort of a stable job, it's going to be there for a while, and you can get a steward. There are other times with the dock

builders it's more difficult because of the numbers of different jobs they go to, the smaller sizes, a lot of the variables. But we're working on a protocol that Mr. Walsh

suggested where, with some of the dock builders, we might use telephone reporting. reporting. So those are our three initiatives at the moment, and it would be at least a million and a half just with Javits and the independent outside. And I think with respect to the Reporting all the same, but telephone

general contractors, I don't know whether that's two-thirds or one-third of their over two million, but that's another significant chunk. Once we accomplish that, we can start to go after some of the smaller associations in the sense of smaller hours. THE COURT: Okay. So I think that about wraps up.

Does the government want to add anything or comment on any of these issues? MS. LaMORTE: THE COURT: No, thank you, your Honor. How about the ESTs, current or incoming,

do you want to comment on anything that we discussed here today? MR. GEIGER: Not at this time, your Honor.

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33 E1STUNIC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 THE COURT: All right. Then I think it would be

worthwhile -- and incidentally, I don't think that we need to meet every month, but I think a meeting in March would be helpful because there would be some milestones that may have been passed, and I think, if you wouldn't mind, let me propose a date. Can you all do March 10 at -- that's a Monday, at noon, would that work? MR. WALSH: MS. JONES: MR. MURPHY: THE COURT: Yes. Yes, your Honor. Yes. I think there's some advantage of having

that meeting for sure to get updated on some of the issues that we have talked about today. Okay. Thanks. Nice to see you all.

MS. JONES: MS. LaMORTE:

Thank you, your Honor. Thank you, your Honor. o0o