The Truth About Project Labor Agreements

TheTruthAboutPLAs.com has been reporting for weeks about the perils of SB 922 and other California legislation catering to Big Labor’s special interests by promoting anti-competitive and costly government-mandated project labor agreements (PLAs).

After sailing through the California legislature via a deceptive gut and amend legislative vehicle originally about tuberculosis screening, Governor Jerry Brown (D) signed SB 922 on Sunday to “prohibit” measures passed by local governments that ban government-mandated PLAs.

Local governments in California like the City of Fresno, Orange County, City of Chula Vista, City of Oceanside, Placer County, Palmdale Water District, San Diego County and Stanislaus County have passed measures prohibiting government-mandated PLAs on construction projects partially or completely funded by their government’s funds.  The measures permit contractors to voluntarily execute PLAs on local projects, as is permitted by the National Labor Relations Act and are intended to increase competition and deliver taxpayers the best possible construction project at the best possible price.

Popular ballot initiatives like San Diego County’s Proposition A, which voters overwhelmingly passed in November 2010 by a 75-24 margin, demonstrate that local taxpayers have had enough with these costly crony contracting PLA schemes. Faced with a threat that the people would put an end to union-favoring government-mandated PLAs, Big Labor called in a favor with Gov. Brown and Sacramento Democrats to pass SB 922.

Today the Wall Street Journal editorial board blasts Gov. Brown and Sacramento Democrats for trampeling the political will of local voters and supporting schemes that steer taxpayer-funded construction projects to prominent donors of the Democrat party (“Shovelling for Labor: California tries to raise the cost of construction projects,” 10/5/11):

We keep hearing that the U.S. needs better roads, bridges and other public works. But then why do politicians keep making it so much more expensive to build them? In the latest example, Governor Jerry Brown signed a bill on Sunday that attempts to prevent California cities from banning government-mandated project labor agreements, or PLAs.

PLAs are pre-hire agreements that contractors negotiate with labor unions. Construction firms must generally agree to play by union work rules, pay workers union wages, and contribute to union health and retirement funds—whether or not the employees they hire belong to a union. Non-union workers usually then have to join the union and pay union dues. According to some studies, PLAs raise costs by 12% to 18%, which explains why cash-strapped governments and tapped-out taxpayers are moving against them.

Arizona, Louisiana, Maine, Michigan and Tennessee have enacted laws in the last year prohibiting local governments and agencies, which often play into the hands of unions, from mandating PLAs. Voters in San Diego County and the San Diego suburbs of Chula Vista and Oceanside approved bans on government-mandated PLAs last November. The cities of San Diego and Sacramento are planning similar ballot measures next year.

Unions hate this trend, so they, er, encouraged Democrats who run the state legislature in Sacramento to pass the bill that Mr. Brown so obligingly signed. Democrats know that the National Labor Relations Act, a federal law, already prevents local governments from banning PLAs altogether. But what states and cities have been trying to do is prevent governments from requiring PLAs. Democrats hope the new law will deter cities from passing laws that keep the doors open to non-union contractors. Cities that ban government-mandated PLAs could face legal challenges and harassment from unions. The state could also refuse to fund their projects.

The California law is the first of its kind, and non-union construction firms fear that other labor-friendly state legislatures will follow Sacramento’s lead. If that happens, taxpayers will lose the limited ability they have to constrain costs and expedite construction. The result? Public projects that cost more and create fewer jobs, though they’ll be the kind of jobs that Democrats prefer—unionized, and thus with dues payable into campaign funds to elect more Democrats.

As usual, the Wall Street Journal editorial board’s analysis is correct.

It is unclear how SB 922 will impact current government-mandated PLA bans enacted by charter cities as well as the progress of ballot initiatives in the City of San Diego and City of Sacramento already underway.

What’s clear is that Big Labor’s chums in Sacramento have no qualms about choking free enterprise, soaking taxpayers with added construciton costs and smothering the will of the people in order to feed their campaign coffers with Big Labor’s campaign contributions.

Expect some legal wrangling, requests for legal opinions and lots of press in the coming weeks.

Update: Fox News covered Jerry Brown’s signing of this disastrous legislation on the October 7 edition of Fox and Friends: