Tentative Settlement Agreement Reached with OE12

DATE:   July 10, 2025

FROM:  Derek Borghi, Director of Labor Relations                 

TO:        Operating Engineers (S. CA) Signatory Employers

RE:        United Contractors Tentative Settlement Agreement                       

Signatory Employers,

On July 1, 2025, the United Contractors negotiating committee concluded months of negotiations with Operating Engineers Local No. 12 regarding a new collective bargaining agreement. The day after the expiration of the previous contract, UCON secured a new three-year agreement (2025-2028) and averted the potential of an industry-wide strike.

UCON’s ratification process will be underway over the next couple of weeks, and the Union is holding their ratification meeting on July 26. While we normally hold the specifics on economics until the agreement is fully ratified, we feel it’s important for contractors to know the agreed-upon 2025 economics for bidding as well as for ongoing projects that will require increases retroactive to July 1, 2025.

Pending ratification, the total package increase for OE12 will be $6.00 for the first year of the agreement, then $5.00 and $4.50 for the subsequent years. Allocations will be made once the agreement is ratified, and we will send those out as soon as they are available.

UCON was able to secure several new terms and conditions, including but not limited to:

• Improved start time language
• Expanded PAGA protective language
• Overdue manning language regarding oilers
• Commitments to the sustainability of the benefits your employees depend on
• Modern shift notification procedures
• More favorable language on cranes requiring oilers
• Economics that average an increase of 5.14% over the term

All the associations found themselves playing strong defense this cycle and this required significant push back on: excessive premium pay demands that would further drive up costs, an attempt to remove PAGA protections employers rely on to mitigate frivolous legal claims, attempts at removing beneficial side letters that help contractors stay competitive, excessive subsistence demands, increases in foreman premiums, and a rejection of autonomous work. A variety of classifications the union wanted added were also dropped.

The most important part of this process has been UCON’s effort to work with the other industry associations to seek the best outcome for the entire industry. Our contractor Co-Chairs prioritized collaboration across association lines to ensure UCON was considering all factors. When the stakes were at their highest, UCON’s negotiations team took input from the industry, assessed the strategic, economic and operational challenges and as the clock ran out, secured a resolution on terms the collective industry found reasonable.

A special thanks to our negotiating team members including Catherine Moncada of Granite Construction Company and Kurt Eddy of Pavement Recycling Systems, Inc. who served as Co-Chairs. In addition, thank you to Rick Andreatos of Pavement Recycling Systems, Inc., Dave Greco of Teichert Construction, and Matt Lovingier of JMH Engineering and Construction, Inc. We want to express our appreciation to the other association industry contractors who also volunteered their time, expertise, and leadership to represent employers in negotiations with Local 12 Operating Engineers.

UCON will provide a Summary of Modifications, which shows the key differences between the old and new agreements, new terms and conditions, economics, and allocations as soon as possible. Questions on specifics can be directed to UCON’s Labor Team.