Project Labor Agreement

A Project Labor Agreement (PLA), also known as a Community Workforce Agreement, is a pre-hire collective bargaining agreement with one or more labor unions that establishes the terms and conditions of employment for a specific construction project. Before any workers are hired on the project, construction unions have bargaining rights to determine the wage rates and benefits of all employees working on the particular project and to agree to the provisions of the agreement. The terms of the agreement apply to all contractors and subcontractors who successfully bid on the project, and supersedes any existing collective bargaining agreements. PLAs are used on both public and private projects, and their specific provisions may be tailored by the signatory parties to meet the needs of a particular project. The agreement may include provisions to prevent any strikes, lockouts, or other work stoppages for the length of the project. PLAs typically require that employees hired for the project are referred through union hiring halls, that nonunion workers pay union dues for the length of the project, and that the contractor follow union rules on pensions, work conditions and dispute resolution.

PLAs are authorized under the National Labor Relations Act (NLRA), 29 U.S.C. §§ 151-169. Sections 8(e) and (f) of the NLRA, 29 U.S.C. §§ 158(e) and (f) make special exceptions from other requirements of the NLRA in order to permit employers to enter into pre-hire agreements with labor unions in the construction industry. The agreements have been in use in the United States since the 1930s, and first became the subject of debate in the 1980s, for their use on publicly funded projects. In these instances, government entities made signing PLAs a condition of working on taxpayer funded projects. This type of PLA, known as a government-mandated PLA, is distinct from a PLA voluntarily entered into by contractors on public or private work—as is permitted by the NLRA—as well as a PLA mandated by a private entity on a privately funded construction project. Executive orders issued since 1992 have affected the use of government-mandated PLAs for federal construction projects and the most recent order, issued by President Barack Obama in February 2009, encourages their use by federal agencies. The use of PLAs is opposed by a number of groups, who argue that the agreements discriminate against non-union contractors and do not improve efficiency or reduce costs of construction projects. Studies of PLAs have mixed results, with some studies concluding that PLAs have a favorable impact, while others find that the agreements can increase costs, and may negatively impact non-union contractors and workers.

History

Early use

The earliest uses of Project Labor Agreements in the U.S. date back to several dam projects in the 1930s, including the Grand Coulee Dam in Washington, the Shasta Dam in California and the Hoover Dam in Nevada. Modern PLAs particularly developed from those used in construction carried out during World War II, a period when skilled labor was in demand, construction unions controlled 87% of the national market and government spending on construction had increased significantly over a short period of time. These early PLAs focused on establishing standard rates of pay and preventing work stoppages.Project Labor Agreements
John T. Dunlop, Harvard University Joint Center for Housing Studies (2002). PLA projects that followed included Cape Canaveral in the 1960s, Disney World from 1967–71 and the Trans-Alaska Pipeline from 1973-77. During this period and subsequently, the unionized share of the construction industry precipitously declined as construction users sought more open competition. By the 1980s, nonunion contractors claimed in excess of 80% of the construction work, in a wide variety of trades, with some variation in different parts of the country.

Boston Harbor and executive orders

The Boston Harbor reclamation project that began in the 1980s became the focus of debate over the legality of PLAs. When the Massachusetts Water Resources Authority elected to use a PLA for the project that mandated union-only labor, the Associated Builders and Contractors of Massachusetts/Rhode Island, Inc. challenged its legality, asserting that the use of a PLA was prohibited by the National Labor Relations Act. In 1990, the First Circuit federal appeals court ruled that the Boston Harbor PLA breached federal labor law because of its union-work requirement.

On October 23, 1992, while the Boston Harbor case was still in court, President George H. W. Bush signed Executive Order 12818 prohibiting federal agencies from exclusively contracting union labor for construction projects. Bush's order prohibited the use of PLAs in federal construction projects. The Clinton administration rescinded this order when President Bill Clinton issued Executive Order 12836 in February 1993, shortly after he took office. This order allowed federal agencies to fund construction projects where contractors required a PLA. One month later, in the Boston Harbor cleanup case, the United States Supreme Court unanimously upheld the use of the agreements on public projects. The Supreme Court ruled that if the government was in the role of a regulator, it was not able to require PLA use under labor law preemption principles, however, it could choose to do so as a market participant without being preempted by the National Labor Relations Act. The Court did not address the separate question of whether government-mandated PLAs are lawful under federal or state competitive bidding laws. The decision led to increased use of PLAs in public-sector construction projects throughout the U.S.

In 1997, Clinton proposed an executive order stating that federal agencies must consider use of PLAs for federally funded projects. Republicans staunchly opposed the move, believing it would restrict federal projects to union contractors only. Clinton abandoned the proposed executive order, but issued a memorandum on June 5, 1997, encouraging federal departments to consider the use of PLAs for “large and significant” projects. The memorandum required that government agencies review each project to decide whether a PLA would allow the agency to increase efficiency and reduce costs.

Prohibition for federal projects

On February 17, 2001, President George W. Bush signed Executive Order 13202, “Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects”, prohibiting the use of PLAs for construction projects with federal funding.Executive Order No. 13202
/ref> This order stated that construction projects receiving federal funding would not be allowed to impose project labor agreements. Specifically, the order declared that neither the federal government, nor any agency acting with federal assistance, shall require or prohibit construction contractors to sign union agreements as a condition of performing work on federally funded construction projects. The order allowed any PLAs that had previously been agreed to continue, and did not affect projects that did not receive federal funding. Bush's order revoked the previous executive order affecting PLAs, Clinton's order 12836, which revoked the executive order issued by President George H.W. Bush in 1992. President George W. Bush issued an amendment in April 2001, allowing certain projects to be exempted from this order, if a contract had already been awarded under an existing PLA at the time of the order.

In August 2001, U.S. District Court ruled Executive Order 13202 invalid in a case examining the use of a PLA by Maryland for the Woodrow Wilson Bridge replacement project. The court ruled that the order was invalid as it conflicted with the National Labor Relations Act. The judge issued a permanent injunction to block enforcement of the order on November 7, 2001. In July 2002, the U.S. Court of Appeals for the District of Columbia overturned the District Court's decision and ordered the removal of the injunction. Following this decision, the Department of Defense, NASA and the General Services Administration formally recognized the order in the Federal Register and implemented it in their construction bidding processes.

Although the Court of Appeals decision in 2002 upheld the executive order prohibiting federal projects from using PLAs, individual states and counties were permitted to use PLAs for some public works where funding was from state and local revenue. These PLAs received opposition by organizations such as the Associated Builders and Contractors, and the Black Contractors Group. A notable example of pro-PLA legislation was passed in New Jersey, which enacted a law in 2002 allowing use of PLAs for some government funded projects.

PLA use since 2009

On February 6, 2009, President Barack Obama signed executive order 13502, which urges federal agencies to consider mandating the use of PLAs on federal construction projects costing $25 million or more on a case-by-case basis. This act served to revoke the Bush executive orders 13202 and 13208 from eight years earlier that prohibited government-mandated PLAs on federal and federally funded construction projects. The Obama order states that federal agencies can require a PLA if such an agreement will achieve federal goals in economy and efficiency. According to the terms of the order, non-union contractors may compete for contracts subject to PLAs, but they must agree to the various terms and conditions contained in each PLA in order to win a federal contract and build a project. A key change from the 2001 order is that by repealing the Bush orders, the Obama order permits recipients of federal funding, such as state, local and private construction owners, to mandate PLAs on public works projects of any size. However, the order does not encourage or mandate recipients of federal assistance to use a government-mandated PLA.

With the February 2009 stimulus bill allocating approximately $140 billion for federal, state and local construction projects, battles over government-mandated PLAs on public works projects from 2009 to 2011 have been widespread at the state and local government level. Government officials and legislators have clashed over using PLA mandates on projects in states including Iowa, Oregon, Ohio, California, and others. Individual communities have voted on whether to prohibit the use of government-mandated PLAs on taxpayer funded construction projects, including ballot initiatives in Chula Vista, Oceanside, and in San Diego County, California in 2010, which resulted in officials being prohibited from mandating or prohibiting the use of PLAs for government projects. In 2011, contractors filed bid protests with the Government Accountability Office against government mandated PLAs for construction projects in New Hampshire, New Jersey, Pennsylvania and Washington, D.C. These protests led to federal PLA mandates being removed from project solicitations in each case.

At the state level, as of June 2019, through legislation or by executive order issued by the state governor, the following states have banned the requirement that PLAs be used for government funded construction projects: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wisconsin. States with executive orders, or that have enacted legislation authorizing or encouraging the use of PLAs on public projects include California, Connecticut, Hawaii, Illinois, Maryland, Maine, New Jersey, New York, Virginia, and Washington State.

Debate over use

There has been much debate over the government-mandated PLAs, particularly for publicly funded projects. The use of project labor agreements is supported by the construction unions, and some political figures, who state that PLAs are needed to ensure that large, complex projects are completed on time and on schedule. According to those who support the use of such agreements, PLAs enable project owners to control costs and ensure that there are no disruptions to the construction schedule, for example from strikes. In particular, proponents of PLAs point to the inclusion of clauses in the agreement that agree to establish labor management problem solving committees that deal with scheduling, quality control, health and safety, and productivity problems during the project. They also state that PLAs ensure that the workforce hired has received training and is of high quality. The use of PLAs in large private construction projects such as the building of the New England Patriots' Gillette Stadium, are given as examples of how PLAs help project owners meet tight deadlines, according to supporters. In addition to the stated benefits to project owners, supporters of PLAs also say that PLA use has a positive impact on local communities, through set goals for local hiring and provision of education.

Groups including the Associated General Contractors of America (AGC), Associated Builders and Contractors (ABC), Construction Industry Roundtable (CIRT), National Federation of Independent Business (NFIB), the National Black Chamber of Commerce, and the U.S. Chamber of Commerce have actively opposed the use of PLAs, particularly for government projects. These groups have challenged the use of such agreements through litigation, lobbying, public relations campaigns. Opponents of PLAs supported the Bush executive order prohibiting government-mandated PLAs, and have argued that between 2001 and 2008, when the executive order was in place, no federal projects suffered significant labor problems, delays or cost overruns attributable to the absence of PLAs. According to those who oppose PLAs, the agreements place restrictions on the hiring and working practices of contractors, and can lead to increased costs for project owners. One of their objections to PLAs is that the agreements require contractors to pay into union benefit plans and obey union work rules. In addition, they oppose the use of PLAs to restrict hiring on projects to construction workers selected by unions through union hiring halls, stating that this does not increase the quality of worker as all those who are licensed in a craft have at least the same level of education and skill, regardless of whether they belong to a union.

Another point of debate is the proportion of construction workers who are unionized. According to opponents, under PLAs contractors must hire their workers through unions, and unionized workers are the majority of those who work on PLA projects, despite non-union workers making up the majority of the construction workforce. Estimates of the percentage of construction workers who are non-union, cited by opponents of PLAs, are around 85%, based on figures from the U.S. Department of Labor Bureau of Labor Statistics, and more recent data puts this figure at 86.9%. This figure is disputed by supporters of PLAs, who state that the figures given by those in opposition to PLAs are misleading and are based on census data that encompasses too broad a concept of a construction worker. According to a study by Cornell University in 2010 cited by Mary Vogel, in Massachusetts 60% of the Construction Trades is unionized. Mary Vogel is the executive director of the Construction Institute, a non-profit organization dedicated to the needs of the unionized construction sector in Massachusetts.

A number of politicians do not agree with the use of the agreements for publicly funded construction projects, and have introduced bills or executive orders that prohibit using the agreements for government projects or prevent the use of public funds for projects using PLAs. This bill was passed in June 2011, making Louisiana the 5th state in 2011 to ban government requirements that contractors use PLAs for publicly funded construction projects.

Impact on cost

A main argument has been the impact of PLAs on project cost. Those who oppose PLAs state that the agreements impact competition for project bids, reducing the number of potential bidders as non-union contractors are less likely to bid due to the potential restrictions a PLA would pose. According to opponents of the agreements, the reduced competition leads to higher bids and a higher cost for the project owner. In addition, opponents argue that the cost may also be increased due to contractors having greater expenses under a PLA. For example, according to Max Lyons of the Employee Policy Foundation, the cost of a project under a PLA is increased up to 7%, since contractors are required to pay their employees the union wage, rather than the government-determined prevailing wage. Opponents have also argued that there is evidence to show that PLA mandates add costs by forcing non-union contractors to pay into union benefit plans and their existing benefit plans. Supporters of PLA use argue that the end cost of projects is not increased if a PLA is in place, compared to projects without such an agreement, since the agreements prevent cost overruns. In response, opponents of the agreements cite examples of projects a PLA was in place and costs overran including Boston's Big Dig project, Safeco Field in Seattle, and the San Francisco International Airport. Three studies carried out on PLA use in school construction by the Beacon Hill Institute in 2003, 2004 and 2006, found that costs were increased by up to 20% in projects in Massachusetts, Connecticut and New York where PLAs were used. A 2009 study of PLAs use, carried out by Rider Levett Bucknall to determine whether PLAs should be used in the U.S. Department of Veterans Affairs' construction projects, found that costs would increase if PLAs are used for construction projects in locations where union membership is low. According to their analysis, in areas including Denver, Colorado, New Orleans

HOME


Content is Copyleft
Website design, code, and AI is Copyrighted (c) 2014-2017 by Stephen Payne


Consider donating to Wikimedia



As an Amazon Associate I earn from qualifying purchases