I recently came across a scaffolding business that is a "signatory" for the local union. This is not an area I was previously familiar with so I spent the last week reaching out to individuals to learn more. I thought it might be useful to summarize some of the things I learned below in case anyone here is interested in buying a business that relies on union employees.

1. Being a union signatory means you can (a) hire union employees and (b) bid on union jobs. This is an important distinction as many municipal jobs MUST be done by union workers at least in CA. This can be a competitive advantage as it gives you access to jobs that non-union shops can't do. It may also signify quality in some cases, as union shops are more expensive but better trained (broad generalization).

2. When you hire union employees, you hire them for the job. They are not necessarily ongoing employees. What happens is that the local union hall has a list of people available for work and you call people off that list, in order, for each job. After the job they get laid off. As a result, you can end up with a rotating list of employees. Because the employee pool is constantly changing, it helps to have a good backlog of jobs so you can keep the same employees rather than having to go back to the union hall and get whoever happens to be available.

3. Not all union workers are equal. At the bottom you have apprentices (trainees). and journeymen (able to work independently). Higher up, you have the management layer which includes roles like foreman (oversee journeymen and apprentices) and superintendents (cover multiple job sites). The higher up you go, the more stable the job pool (i.e., you may have one foreman that sticks around even though the journeymen get hired/laid off for each individual job). Of course this depends on the pipeline/type of work. One thing to consider here is who your superintendent/foreman is and what their relationship is with the union.

4. You can buy a construction-related company (like scaffolding) without having relevant experience yourself, but you will need someone to act as a "qualified individual" on your behalf to hold the licenses. In the case of a scaffolding company, you would need someone who already has a license (C-61/D-39 in CA) or has the experience to qualify/take the test (4 years out of the last 10 at the journeyman level working in that field). Many times, companies with long-term employees have people that could qualify on your behalf, you'd just need to appropriately incentivize them so they stick around. Could be a big risk, though.

Just learned everything this week so of course I could be wrong, but trying to help share potentially useful information :) Happy to chat with anyone interested in similar businesses!