The Truth About Project Labor Agreements

Today New Jersey Gov. Chris Christie (R) vetoed legislation (S. 2425) expanding the ability of public entities in New Jersey to mandate discriminatory and costly project project labor agreements (PLAs) onto taxpayer-funded contracts to rebuild New Jersey following Hurricane Sandy.

According to the Governor’s website [emphasis added]:

“Governor Christie vetoed S-2425 because it could negatively impact efforts to rebuild and recover from Superstorm Sandy. Under current New Jersey law, project labor agreements are only permitted in public works contracts for the construction, reconstruction, demolition, or renovation of buildings at the public’s expense. This proposal revises current law to authorize these agreements in other public works projects, and would significantly alter public contracting in this State at a time when the reconstruction, rebuilding, and redevelopment of public infrastructure is a priority.”

Here is Gov. Christie’s veto statement.

UPDATE 4/17/13: Check out the WSJ editorial criticizing government-mandated PLAs and applauding Gov. Christie’s veto here.

According to NorthJersey.com (“Christie vetoes bill giving unions a leg up in Sandy infrastructure projects,” 4/15/13):

“The bill, sponsored by Senate President Stephen Sweeney, D-Gloucester, would have made major highway and bridge work eligible to be covered by project labor agreements, which set pay and other work conditions that traditionally favor unions.

State and local governments have to approve the use of such agreements for specific projects, and Sweeney’s bill would have expanded their use to some of the largest infrastructure projects in the recovery effort.

Construction jobs have been among the hardest hit in the economic downturn, and an infusion of billions of dollars in federal recovery money is expected to give a boost to the sector.

Unions traditionally support project labor agreements, and Democrats have argued their use could boost employment.

Yet Christie wrote that the bill “would significantly alter public contracting in this State at a time when the swift reconstruction, rebuilding, and redevelopment of public infrastructure is a priority.”

Sweeney, who rose through the ranks in the ironworkers union, shot back in a statement, accusing Christie of undercutting the state’s middle class even while a politically connected Florida firm received a lucrative contract to remove storm debris.

“This administration continues to see no problem with the recovery effort being led by out-of-state companies employing people not from New Jersey,” he said, referring to AshBritt Inc., which has come under fire from Democrats in recent months. “It simply lacks sense to not try and have as many people as possible from this state employed in rebuilding it.”

TheTruthAboutPLAs.com and the merit shop contracting community thank Gov. Christie for the veto. PLA mandates on Sandy reconstruction would limit opportunities for 75 percent of New Jersey’s private construction workforce to rebuild their own communities because they are not unionized.

In addition, this legislation would lead to billions in wasted federal tax dollars. For example, research conducted by the New Jersey Dept. of Labor and Workforce Development found New Jersey PLA mandates increased construction costs by an average of 30 percent. In other words, if signed into law, this bill would needlessly increase costs and authorize a multi-billion dollar taxpayer-funded handout to the construction labor unions favored in typical PLAs.

During his 2009 campaign, Gov. Christie’s campaign pledge #50 promised take steps to eliminate PLA mandates in New Jersey.

“Fifty:

I will eliminate special interest labor union giveaways that increase spending and taxes by ending the use of project labor agreements, which drive up the cost of public construction projects and fail to deliver a public benefit at a time when the economy is shedding jobs and taxpayers are struggling to make ends meet.”

Today Gov. Christie proved he is a man of his word and has helped create the appropriate conditions to rebuild New Jersey safely, ethically and at the best possible price and value for taxpayers.

The Democrat-controlled New Jersey Legislature passed S. 2425 shortly after the federal government approved legislation to appropriate approximately $60 billion in federal funds to Sandy relief and reconstruction efforts.

In 2009, President Obama issued Executive Order 13502 encouraging federal agencies to mandate PLAs on large-scale federal projects exceeding $25 million in total costs on a case-by-case basis. Large-scale construction projects procured by federal agencies to rebuild after Hurricane Sandy might be subjected to union-favoring federal PLA mandates.

Thanks to Gov. Christie’s veto, at least projects receiving state dollars will not be subject to PLA mandates, (with the exception of contracts for buildings, where PLA mandates are allowed under New Jersey’s current pro-PLA law) which will help keep Hurricane Sandy reconstruction contracts competitive and create jobs for both qualified union and nonunion New Jersey hardhats and companies.

Check out TheTruthAboutPLAs.com’s earlier posts for a comprehensive look at the politics behind this bill.  Also, see coverage of the Wall Street Journal’s editorial blasting potential PLA mandates on Sandy relief work.

Thank you to everyone who took time to oppose S. 2425.

Learn more about the New Jersey politics behind the passage of S. 2425 here:

• PolitickerNJ.com, Sources: Sweeney leans on Oliver to get his version of PLA bill done in the Assembly, 2/11/13
• NJBiz.com, Industry cool to Sweeney bill revising labor agreements, 2/4/13
• RedState.com,  Valentine’s Day Massacre? NJ Dems Take Aim At Gun Owners & Non-Union Construction Workers, 2/12/13
• Asbury Park Press, Uneasy times for Dems facing Christie juggernaut, 1/16/13
• NJ.com, N.J. Senate passes bill regarding hiring contractors in wake of Hurricane Sandy, 1/14/13