The Truth About Project Labor Agreements

As TheTruthAboutPLAs.com reported Jan. 17 and Jan. 19, legislation is swiftly progressing through the New Jersey Legislature (A3679/S2425) expanding the use of anti-competitive and costly government-mandated project labor agreements (PLAs) onto state highway, bridge, pumping station, and water and sewage treatment plant projects in need of reconstruction following Hurricane Sandy.

S2425 passed the Senate Jan. 14 and A3679 awaits a full Assembly vote after it passed out of the New Jersey Assembly Budget Committee Jan. 28 following a Jan. 24 hearing. Democrats control the Senate 24-16 and the Assembly 48-32.

However, an alliance of union and merit shop construction industry stakeholders are opposed to this legislation and are taking steps to prevent it from passing the Assembly or getting signed into law by Gov. Christie.

In fact, the New Jersey Laborers Union (LiUNA) testified against the bill, as did an association representing unionized utility and transportation contractors.

At the Jan. 24 Assembly Budget Committee hearing, NJ LiUNA official Joe McNamara submitted an opposition card and testified against the measure at the 39:28 mark of this hearing recording, citing concerns government-mandated PLAs may lead to jurisdictional problems between the various unions assigned work by government-mandated PLAs.

Yesterday, TheTruthAboutPLAs.com posted this column by the CEO of a union contractors association that highlighted how government-mandated PLAs harm union contractors and union members and lead to an increase in jurisdictional disputes, increased costs and other problems.

This Jan. 21, 2013, letter from the New Jersey Utility and Transportation Contractors Association (UTCA) to the New Jersey Assembly Budget Committee describes similar concerns with A3679 and government-mandated PLAs:

…A-3679 hurts union contractors by severely curtailing the control they currently possess over their work, the composition of their workforce, and the overall structure of the jobsite. It is particularly injurious when it comes to a contractor’s bargaining power during labor negotiations which becomes severely limited when a PLA is in place.  Very often, Project Labor Agreements give rise to union jurisdictional battles, bringing new trades onto the jobsite that would otherwise not be involved in infrastructure construction projects.  The unions that are more traditionally found building our roads, bridges, and utilities and that are better trained and accustomed to the type of work that is being performed, would lose a major portion of their work as a result of the PLA.

UTCA/NJ respectfully urges your opposition to this bill.  The legislative intent behind the original statute, and the specific agreement that was reached to exempt infrastructure construction agreed to by all parties, should not be overturned.  Unlike the consensus that characterized the PLA compromise in 2002,  the entire industry is not currently in agreement with the direction of this legislation….

The NJ UTCA is not alone in their opposition to government-mandated PLAs.

Another contractor association representing a large group of unionized contractors, the Associated General Contractors (AGC), opposes government-mandated PLAs. This document (posted below for your convenience) from AGC  explains how government-mandated PLAs harm union contractors (AGC negotiates union collective bargaining agreements with multiple unions across the country):

How Government-Mandated Labor Agreements Impact Union Contractors

• Government mandates for project labor agreements disrupt the often complex relationships between union contractors and the building trade unions, interfering with their efforts to negotiate competitive labor agreements for their common benefit.
• On their members’ behalf, over 50 of AGC’s 100 chapters negotiate local area agreements with the building trade unions. One reason that government authorities cannot demonstrate that mandating a project labor agreement will have any economic or other benefit is that many of these local area agreements are already state-of-the-art. Many of these agreements already provide the benefits that government-mandated labor agreements are said to provide, such as:
  • Common or similar grievance and arbitration procedures among crafts.
  • Common or similar jurisdictional dispute resolution procedures among crafts.
  • Common work rules, hours of employment, holiday and shift provisions.
  • No strike, no lockout clauses.
• The terms and conditions that government officials negotiate with the building trade unions are rarely more competitive or cost-effective than the terms and conditions found in the local area agreements. In fact, government-mandated labor agreements frequently conflict with the local area agreements that they displace. They introduce new and unfamiliar terms and conditions that may increase even union contractors’ costs of performing the work. For example, government-mandated labor agreements frequently:
  • Require contractors to deal with additional or different unions, whether familiar or not;
  • Establish different grievance and arbitration procedures, with their own rules of evidence and the like;
  • Establish different rules and procedures for resolving jurisdictional disputes among the building trade unions, often reviving historical claims not recognized in the local area;
  • Establish new and unfamiliar work rules that contractors cannot use effectively;
  • Add reporting and other paperwork requirements that drive up the contractors’ overhead.
• Government-mandated labor agreements may require labor practices and work assignments that conflict with the Davis-Bacon Act and/or state prevailing wage laws. Any such conflicts can cause not only jurisdictional disputes among the building trade unions but also pay disputes. Such prevailing wage laws have their own job classifications.
• If it disregards the expiration date for the local area agreements, a government-mandated labor agreement can significantly impact the union contractors’ necessary effort to negotiate competitive agreements for the future. Such a mandated project labor agreement may enable union members to continue to work at the site that the agreement covers while the union contractors and their other clients have to deal with labor unrest. The negative effects on the local marketplace can last for many years.

TheTruthAboutPLAs.com agrees with these concerns about the negative impact of government-mandated PLAs on union contractors and union members in New Jersey and across the country.

Besides these groups and ABC New Jersey, the National Federation of Independent Business (NFIB) is also opposed A3679 and have issued this grassroots alert encouraging NFIB members to let Assembly lawmakers know A3679 is widely opposed.

NFIB and AGC are also part of a diverse coalition of construction industry associations and employer groups opposed to government-mandated PLAs on federal and federally assisted construction projects promoted by President Obama’s Executive Order 13502, which encourages federal agencies to mandate PLAs on a project-by-project basis on contracts exceeding $25 million in total cost.

Billions of dollars worth of federal contracts for Hurricane Sandy reconstruction may contain PLA mandates. Coupled with this recent legislative push to use PLAs on additional state projects, government-mandated PLAs will devastate New Jersey taxpayers and the merit shop contracting community.

Hurricane Sandy reconstruction needs to remain competitive and free from federal and state PLA mandates and preferences.

After contacting Assembly officials in opposition to A3679, write Gov. Christie on twitter (@GovChristie) and tell him to veto  S2425/A3679 if it passes the Assembly.