The Truth About Project Labor Agreements

On August 15, State of Nevada District Court Judge Jerry Wiese ruled that a project labor agreement (PLA) imposed on contractors by the elected Clark County Board of Commissioners for a $17 million prison project in Las Vegas violated the state’s competitive bidding laws. The Nevada Supreme Court has asked Judge Wiese to evaluate the legality of the project labor agreement based on specific criteria previously established by the Nevada Supreme Court regarding whether or not a project labor agreement runs afoul of the state’s competitive bidding laws.

In his decision, Wiese noted that certain requirements in this project labor agreement exhibited “favoritism” toward union contractors and union workers – something not permitted in state law. Specifically, he noted the provisions requiring Merit Shop contractors to pay employee benefits into union trust funds (instead of their established benefit programs) and limiting the use of a Merit Shop contractor’s “core workforce” to seven employees, regardless of the number of employees needed to perform the work.

The elected Clark County Board of Commissioners had imposed this project labor agreement as a bid specification for the Clark County Detention Center – North Tower Renovations, Phase 1. Parties that negotiated the agreement were Clark County (Nevada), the Southern Nevada Building and Construction Trades Council and its affiliated unions, and the Southwest Regional Council of Carpenters and Joiners. Contractors were not permitted to participate in the negotiations, but had to sign the union agreement as a condition of working on the project.

Theodore (Teddy) Parker, III of Parker Nelson & Associates in Las Vegas was the winning attorney, representing the Nevada Business Coalition and the Nevada Chapter of Associated Builders and Contractors. Testifying as expert witnesses in support of the plaintiff were Neil Opfer, a University of Nevada, Las Vegas (UNLV) professor in the College of Engineering, and Kevin Dayton, State Government Affairs Director of Associated Builders and Contractors of California. The attorney for the Southern Nevada Building and Construction Trades Council was able to disqualify Dayton as an expert witness after he completed damaging comprehensive testimony based on his extensive experience with Project Labor Agreements.

Here are some specific provisions of the project labor agreement that illegally favor some contractors and workers over others:

• The Contractor will pay contributions to the established employee benefits funds in the amounts designated in the appropriate Schedule A and will make all employee-authorized deductions in the amounts designated in the appropriate Schedule A, including adjustments to the contribution rates that may be made in renegotiation of the local collective bargaining agreement that serves as the basis for Schedule A during the life of the Contractor’s contract in accordance with the provisions of Article XVIII, Section 2 of this Agreement; provided, however, that the Contractor and the Union agree that only such bona fide benefit plan contributions , as determined by the State Labor Commissioner, and included in the prevailing wage determination, shall be included in this requirement and shall be made by the Contractor. Authorized employee deduction programs established or negotiated under the applicable Schedule A or by the parties to this Agreement during the life of this Agreement may be added, subject to the limitations upon such negotiated changes contained in Article XVIII, Section 2 of this Agreement.
• The Contractor adopts and agrees to be bound by the written terms of the legally established trust agreements specifying the detailed basis on which payments are to be made into, and benefits paid out of, such Trust Funds. The Contractor authorizes the parties to such Trust Funds to appoint Trustees and successor Trustees to administer the Trust Funds and hereby ratifies and accepts the Trustees so appointed as if made by the Contractor.
• All craft workers covered by the PLA must be dispatched from the appropriate hiring hall prior to the commencement of any work. Each craft worker, either “core” or referred, must submit to the General Contractor or Subcontractor his dispatch slip on the first day of his employment on that contract. The General Contractor will maintain a file with a copy of all dispatch slips of both their craft workers as well as their Subcontractors.
• The parties recognize the Owner’s interest in providing opportunities to participate on the Project to minority- and women-owned business enterprises as well as other enterprises which may not have previously had a relationship with the Unions signatory to this Agreement. To ensure that such enterprises will have an opportunity to employ their “core” employees on the Project, the parties agree that in those situations where a Contractor not a party to the current collective bargaining agreement with the signatory Union having jurisdiction over the affected work is a successful bidder, the Contractor may request by name, and the local Union will honor, referral of persons who have applied to the local union for Project work and who meet the following qualifications…”
• The Union will refer to such Contractor one journeyman employee from the hiring hall out-of-work list for the affected trade or craft, and will then refer one of such Contractor’s “core” employees as a journeyman and shall repeat the process, one-to-one, until such Contractor’s crew requirements are met or until such Contractor has hired seven (7) “core” employees, whichever occurs first. Thereafter, all additional employees in the affected trade or craft shall be hired exclusively from the hiring hall out-of-work list(s).
• For the duration of the Contractor’s work the ratio shall be maintained and when the Contractor’s workforce is reduced, employees shall be reduced in the same ratio of core employees to hiring hall referrals as was applied in the initial hiring.