Anti-competitive government-mandated project labor agreements (PLAs) are special interest kickback schemes that end open, fair and competitive bidding on construction projects.
PLAs discourage or eliminate merit shop contractors from competing for and winning contracts on construction projects. Construction contracts subject to PLAs are almost always awarded exclusively to unionized contractors and their all-union workforces. Less competition and archaic and inefficient union rules increase the cost of construction projects subject to PLAs.
According to the most recent data from the U.S. Department of Labor’s Bureau of Labor Statistics, only 13.2 percent of the 2012 U.S. private construction workforce belongs to a union. This means PLAs discriminate against more than eight out of 10 construction workers who would otherwise work on construction projects if not for a PLA.
PLAs typically include the following provisions that discourage merit shop contractors from working on PLA projects:
- Despite the fact that contractors have their own benefit plans, PLAs require merit shop contractors to pay their workers’ health and retirement benefits to union trust funds. Thus, companies have to pay benefits twice: once to the union and once to the company plan. Nonunion employees never see any of the benefit contributions sent to union plans unless they decide to join a union and remain with the union until vested in plans.
- Paying into underfunded and mismanaged union pension plans can also expose merit shop contractors to significant pension withdrawal liabilities. Signing a PLA and exposing a company to pension liabilities could bankrupt a contractor or prohibit contractors from qualifying for construction bonds needed to build future projects.
- PLAs require merit shop companies to obtain apprentices exclusively from union apprenticeship programs. Participants in federal and state-approved nonunion apprenticeship programs cannot work on a job covered by a PLA. This means craft professionals enrolled in all apprenticeship programs other than those offered by the union are excluded from work in their hometowns.
- PLAs require merit shop companies to obtain their workers from union hiring halls. This means a merit shop company has to exclude their hard working employees from specific jobsites and exclusively use unfamiliar union workers. In rare instances, merit shop employers can use a limited number of their own employees, but employers must send their nonunion employees to the union hiring hall and hope the union sends the same employees back to that specific PLA jobsite.
- Nonunion employees may have to pay union dues and fees or join a union in order to work on a PLA project.
Learn more about the provisions in typical PLAs and how they harm nonunion contractors and employees at “Project Labor Agreement Basics: What is a PLA?” (4/24/09).
PLAs drive up the cost of construction projects. By unnecessarily limiting bidders and following outdated and inefficient union work rules, PLAs consistently and unnecessarily drive up costs on projects. Analysis of numerous academic studies of public construction projects subject to prevailing wage laws indicate PLAs increase the cost of construction between 12 percent and 18 percent when compared to similar projects not subject to union-only PLAs.
PLAs discriminate against merit shop contractors and disadvantaged businesses. This discrimination is particularly harmful to women- and minority-owned construction businesses – whose workers traditionally have been under-represented in unions, mainly due to artificial and societal barriers in union membership and union apprenticeship and training programs. Get the facts about the impact of union-only PLAs on women- and minority-owned construction businesses and workers here and here.
PLAs harm local workers. Proponents of PLAs claim PLAs ensure the use of local workers. But the truth is that PLAs fail at real local hire and job creation (learn more here). PLA supporters fail to mention the term “local workers” excludes local nonunion workers. This rhetoric is particularly misleading since only 13.2 percent of U.S. construction workers belong to a union. In construction markets where the demand for union labor is greater than the supply, union workers from outside the local area are given preference over qualified local nonunion workers on PLA projects. These union workers are called travelers or boomers, and they take jobs away from local and qualified nonunion craft employees.
PLAs take away employee’s rights. Employees normally are permitted to choose whether to join a union through a card check process or a federally supervised private ballot election. PLAs require unions to be the exclusive bargaining representative for workers during the life of the project. The decision to elect union representation is made by the employer – when agreeing to participate in a PLA – rather than the employees. PLAs are called pre-hire agreements because they can be negotiated before the contractor hires any employees or employees vote on union representation. The National Labor Relations Act (NLRA) generally prohibits pre-hire agreements, but an exception in the act allows for these agreements only in the construction industry. In short, government mandated PLAs strip away the right of construction workers to a federally supervised private-ballot election or a card check election when deciding whether or not to unionize their workplace.
PLAs are not necessary to, and are not successful at, ensuring labor peace or keeping a project safe, on-time, on budget, or in compliance with labor laws. Unions use the threat of labor strikes and unrest to leverage construction users into requiring PLAs on construction projects. This is a particularly disingenuous argument that flirts with blackmail, because unions cause many project delays through illegal organizing and jurisdictional disputes on jobsites. In addition, unions have struck on PLA projects, calling into question the value of the agreements (learn more here). In contrast, merit shop workers do not strike, yet they are typically discouraged from working on PLA projects.
A 2011 report by ABC general counsel Maury Baskin, Government-Mandated Project Labor Agreements: The Public Record of Poor Performance (2011 Edition), documents the numerous broken promises and mishaps on government mandated PLA construction projects such as the infamous Big Dig in Boston, MA. Additional research is available here.
To learn more about PLAs, please contact Ben Brubeck at Associated Builders and Contractors or get more information from ABC’s Informational PLA website and facebook page at www.facebook.com/TheTruthAboutPLAs.