The Truth About Project Labor Agreements

On 6/19, the Brentwood, California City Council agreed to a project labor agreement (PLA) that will govern the construction of its $65 million downtown Civic Center. You can learn more about the unfortunate decision and details of the discriminatory and costly PLA here and here.

This article provides a concise overview of the events leading up to the vote, including the Brentwood City Council’s questionable decision to spend taxpayer dollars to fund a study conducted by a  pro-PLA firm Scarth-Lyons and Associates.  As predicted, in a presentation before the Brentwood City Council, Mike Vlaming of Scarth-Lyons recommended the use of a PLA. What would you expect from someone with deep ties to organized labor? (Vlaming serves as a trustee on the California Ironworkers Anuity Trust and as an executive director of a local union Crane Owners Association).

Now Scarth-Lyons is making money negotiating the PLA between the Brentwood City Council and the construction unions. Really!??

This LTE explains the financial reasons why non-union contractors won’t sign a Brentwood Civic Center PLA.

Today the Brentwood City Council voted 3-2 to send the civic center project out to bid (“Two big steps for civic center,” 6/26).

In memory of the benefits of free and open competition on the Brentwood Civic Center, it is worth revisiting this excellent guest commentary in the local paper from  TheTruthAboutPLAs.com contributor Kevin Dayton (“Union only agreement will cost taxpayers,” 5/19).

Your Brentwood City Council plans to build a $75 million local government complex. The prospect of an expensive public works project at a time when the economic outlook is grim has brought powerful special interest groups to town.

Construction union officials have left their established bases of power at the Contra Costa Board of Supervisors and the Richmond City Council. With backing from some of the Bay Area’s most powerful regional politicians, they’ve swooped down on the City of Brentwood with some clever proposals to gain a union monopoly on $75 million worth of taxpayer-funded construction.

Big-time metropolitan politics has arrived in Brentwood, and the City Council has been caught unprepared. On March 24, the council actually allowed a consultant for a unionized construction management firm and a lawyer who negotiates labor union agreements to sit at their dais and advocate for a special agreement to be negotiated with construction unions for the civic center complex.

The labor agreement sounded nice – after all, none of these very interested outside parties had anything bad to say about it – and so the council voted 4-1 to spend up to $20,000 for the lawyer to write an alleged “study” to support it. What the council regrettably initiated was a local fight over the most contentious and controversial issue in the construction industry: local governments mandating their construction contractors to sign a Project Labor Agreement (PLA) with unions as a condition of working on a public-works project.

PLAs are the primary political tactic of construction unions to undercut their non-union competition and raise costs of construction for their benefit. It’s a reasonable question to ask how a PLA undercuts competition, considering that all contractors – both union and non-union – will have to pay generous state-mandated prevailing wages to all workers on the civic center project.

One provision in PLAs compels non-union contractors to pay their employees’ health and pension benefits to union trust funds instead of the company’s own benefit plan. At the conclusion of the project, the benefit payments are permanently lost to the unions unless the employees remain in the unions.

This might be convenient for the underfunded union pension plans, but it is unfair to the employees. A non-union contractor who agreed to this scheme would have to pay benefits both to the union and to its own benefit plans – thus doubling the substantial costs of providing benefits. Who wants to bid under those conditions?

Another provision contained in PLAs is the requirement that all workers join the union through the payment of union initiation fees and dues. The choice for the non-union worker: pay up or go elsewhere for work.

No local government that cares about fiscal responsibility would adopt an unnecessary requirement for its contractors to sign a union agreement. Most local governments in California want to maximize the number of capable and responsible bidders, regardless of whether or not their employees chose to belong to a union.

It’s not a coincidence that in the early 2000s, the first three school districts in the Bay Area to require contractors to sign PLAs were three Bay Area school districts that have recently experienced state bailouts: West Contra Costa, Vallejo and Oakland. PLAs thrive where local governments are fiscally irresponsible and where voter accountability is low.

Of course, as you’ve probably already guessed, PLAs are not about logic. They are about politics. Non-union public-works contractors have been fighting proposed PLAs in Northern California for 15 years, and behind every push for a union PLA is a local politician who dreams of union political support for a campaign for higher office.

If the Brentwood City Council continues to contemplate the idea of a PLA for this civic center, federal and state legislators and a wide variety of Bay Area local elected officials will begin intensely pressuring them on behalf of construction unions to vote for a PLA. Council meetings will be repeatedly packed with people from all over Northern California. This happens every time there is a divisive vote on a PLA.

At stake is the degree of bid competition for a $75 million project paid for with your tax dollars. As a citizen of Brentwood, you need to speak out now to your City Council if you oppose further consideration of this Project Labor Agreement union scheme. Soon all local voices of reason will be lost in the ruckus of big-time politics.