Anti-competitive government-mandated project labor agreements (PLAs) are special interest kickback schemes that end open, fair and competitive bidding on taxpayer-funded construction projects.
PLAs discourage or eliminate merit shop contractors from competing for and winning contracts for 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 13.9 percent of the 2016 U.S. private construction workforce belonged to a union. This means PLAs discriminate against more than eight out of 10 construction workers who would work on construction projects if not for a PLA.
The following provisions typically discourage merit shop contractors from working on PLA projects.
- PLAs require merit shop companies to obtain their workers from union hiring halls. This means a merit shop company must exclusively use unfamiliar union workers on specific jobsites instead of their own skilled and experienced employees. 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, even if they are in a Right-to-Work state.
- Despite the fact contractors have their own benefits plans, PLAs require merit shop contractors to pay their workers’ health and retirement benefits to union benefit and pension 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 benefits from contributions sent to union plans unless they decide to join a union and remain with the union until vested.
- Paying into underfunded and mismanaged union pension plans can 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 apprenticeship programs other than those offered by a union are excluded from work in their hometowns.
- PLAs for contractors to follow inefficient and archaic work rules defined in the agreement or related collective bargaining agreements for each trade on the jobsite.
Learn more about the provisions in typical PLAs and how they harm nonunion contractors and employees at “Understanding Core Workforce Provisions in Project Labor Agreements” (4/7/14) and “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-favoring PLAs on women- and minority-owned construction businesses and workers here and here.
PLAs harm local workers. Proponents claim PLAs ensure the use of local workers, but the truth is PLAs fail at local job creation (learn more here). PLA supporters fail to mention the term “local workers” excludes local nonunion, women, minority and veteran workers. This rhetoric is particularly misleading because only 13.9 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 qualified nonunion craft employees. Here is anecdotal evidence that PLAs don’t result in better local hire outcomes.
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 law 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 to unionize their workplace. Learn how PLAs function in Right to Work states here.
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 leverage the threat of labor strikes and unrest to compel construction users to require 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. In addition, unions have struck on PLA projects, calling into question the value of the agreements. In contrast, merit shop workers do not strike, yet they are typically discouraged from working on PLA projects.
As documented in the following linked blog posts, government-mandated PLAs do not guarantee a safe jobsite, nor do PLA mandates ensure compliance with labor laws. Some courts have found PLA mandates violate state and federal competitive bidding laws. In fact, some unions and unionized contractors oppose PLA mandates.
A 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.
Additional research and studies on the cost and negative impact of government-mandated PLAs is available here.