By STEVEN GREENHOUSE

July 1, 1998

NEW YORK -- More than 20,000 construction workers protested the city's use of a nonunion contractor in a turbulent rally Tuesday that erupted into clashes with the police and paralyzed traffic in midtown Manhattan.

The rally and a spontaneous march that followed -- whose size and ferocity took city, police and even union leaders by surprise -- left 18 police officers and three civilians hurt, most with minor injuries, and 38 demonstrators under arrest, one for assaulting a police horse, police said.

One protester was hospitalized in serious but stable condition after being kicked in the head by a police horse.

Amassing at the headquarters of the Metropolitan Transportation Authority at 44th Street and Madison Avenue, the demonstrators brought traffic to a standstill for blocks around during the morning rush hour.

Afterward, thousands of demonstrators marched across town toward the nonunion construction site at 54th Street and Ninth Avenue, where several workers broke through barricades, threw bottles and scuffled with the police, some of whom responded with mace.

Police Commissioner Howard Safir acknowledged that officers were caught off guard because the department anticipated 10,000 demonstrators, but, he said, there were 40,000 at the demonstration's peak. The rally's main sponsor, the Building and Construction Trades Council of Greater New York, estimated there were about 30,000 demonstrators, while some union officials said that there might have been only 20,000.

Mayor Rudolph Giuliani, who blocked a protest by taxi drivers earlier this summer by arguing that they were trying to shut down the city, acknowledged that his administration was surprised by the size of Tuesday's protest.

"Had the construction workers given the same advance warning that the taxi drivers gave, they'd have been dealt with in the same way," he said.

From around 8 a.m. to noon, much of midtown Manhattan was crippled by the swirling crowds, as thousands of burly, often shouting, construction workers roamed through the streets, angering bewildered drivers, pedestrians and storeowners. At the same time, police vehicles, sirens screaming, repeatedly crisscrossed midtown as they scrambled to maintain control..

Some construction workers wrestled with the police, climbed on cars, waved flags and threw garbage bags at officers. Safir said he started with 550 police patrolling the demonstration but quickly increased the number to 1,000. By walking off the job, the demonstrators shut down several hundred construction sites throughout New York City.

At a news conference at City Hall, Giuliani assailed the demonstrators, especially those who attacked the police. He said the city would sue the building trades council to demand compensation for the damage and seek an injunction that would severely punish future out-of-control demonstrations.

"We're just not going to tolerate this kind of activity, whatever the nature of the dispute," Giuliani said.

Paul Fernandes, a spokesman for the Building Trades Council, said the rally's organizers also were caught unaware by the spontaneous march and unsuccessfully urged the workers to stop.

"We're apologizing not for the entire demonstration, we're apologizing for any vandalism or violence that occurred," Fernandes said. "If the police are saying there were 40,000 people there, and 20 or 30 of them misbehaved, well, we're not minimizing that they misbehaved, but most people behaved properly."

He said the unions would make restitution for any personal injury or property damage that was done by the demonstrators.

The demonstrators gathered to pressure the MTA to end its contract with Roy Kay Inc., based in Freehold, N.J., that was awarded a $32.6 million contract to build a new transit command center.

On three different occasions over the past month, 1,000 to 2,000 construction workers have demonstrated at the Ninth Avenue site. But frustrated that those protests were gaining little attention and hardly seemed to be pressuring the MTA, the construction unions spent the past 10 days organizing Tuesday's rally.

The demonstration was another example of the growing militancy that many of the nation's labor unions are showing when the wages and jobs of their members are threatened. But what was to be one of labor's proudest days -- it was one of the largest union protests in New York in years -- turned out in many ways to be an embarrassment because the street chaos greatly overshadowed the unions' message.

After the demonstration, union leaders said they were not planning any more demonstrations, saying the reason was not Giuliani's warnings, but that they had finally gotten their message across.

Many demonstrators said it was worth giving up a day's pay to show they were serious about drawing a line against Roy Kay and other nonunion contractors.

"This job's nonunion, and it should be union," said Ralph Falco, a tile layer from Paterson, N.J. "We can't afford to lose jobs like this."

MTA officials, who are permitted by law to award contracts to nonunion companies, said that Roy Kay won the contract because it was the lowest bidder. But union officials, as well as an association of 1,000 unionized building contractors, urged the MTA to drop Roy Kay, asserting that it is not a responsible contractor and that the law requires that contracts go only to responsible firms.

To make their argument, labor leaders pointed to numerous safety violations by Roy Kay, to New York State's investigating it for submitting false documents and to its workers' rupturing a gas line at Rutgers University last year, causing the evacuation of more than 100 students.

The Roy Kay contract is by no means the first work the MTA has awarded a nonunion company. But union officials said they believed it was important to protest the contract because of Roy Kay's run-ins with the law and because they feared the trend toward nonunion contracts was growing.

Under city and state law, contractors that make the lowest bid generally win the job. But there is a caveat -- the city and state can usually reject the lowest bidder if it is found not to be a responsible contractor, for instance, if it committed numerous environmental and safety violations.

Union officials insisted that Roy Kay should be removed from the project, pointing to a report, entitled "Anatomy of a Bad Contractor," that Anthony Weiner, a City Council member from Brooklyn, did about Roy Kay. The report described many of Roy Kay's violations, including two serious federal safety citations the company received last November for failing to protect workers from a cave-in during excavation work at Rutgers.

Building trades officials say they hope the state Labor Department will soon bar Roy Kay. The company is under investigation, having already been suspended after construction unions provided evidence that it had submitted false documents to qualify for a state program that trains construction apprentices.

A woman who answered the telephone at Roy Kay's headquarters Tuesday said the builder had no comment about the attacks against it.

In a telephone interview, MTA Chairman E. Virgil Conway defended awarding the contract to Roy Kay. "Under state law we are required to accept the lowest bid whether that be union or not," he said.

But Edward Malloy, president of the building trades council, said that was an incomplete reading of the law because it forgot that bidders not deemed responsible can be rejected.

Copyright 1998 The New York Times Company