Project Labor Agreement Basics: What is a PLA?

36 April 24, 2009  Featured

A government-mandated project labor agreement (PLA) is an anti-competitive and costly scheme designed by Big Labor and sympathetic public officials to funnel construction contracts to unionized contractors and union members while cutting competition from qualified merit shop contractors and their skilled merit shop employees.

A PLA is a multi-employer, multi-union, pre-hire collective bargaining agreement that PLA proponents market to public and private construction owners as a tool to systemize labor relations between multiple construction trade unions and contractors on a specific construction site.  A PLA is a contract, so it can say just about anything, although PLAs contain common provisions that are typical in most agreements.

An overwhelming body of evidence suggests that PLAs have the practical effect, if not the stated purpose, of eliminating competition from merit shop contractors and their employees — qualified and skilled craft professionals — who compose 86.8 percent of the 2012 U.S. private construction workforce (updated Jan. 2013).

If you want to read an actual PLA, please review a sample PLA from Juneau, Alaska from the City and Borough of Juneau’s Consolidated Public Works Facility, Phase II – E09-107. will use language from this PLA as a point of reference to document standard provisions in PLAs that are designed to discourage competition from merit shop contractors.

PLAs are typically negotiated exclusively by construction unions and a project owner or agent of the owner (public officials often blindly agree to a PLA without reviewing the final contract), yet the agreement is actually between contractors (and their subcontractors) and labor unions.

Part 1 Section 1.1.A – It shall be understood that the PLA is an exclusive agreement between the eventual Contractor (and Subcontractors) and the organized labor unions.

A major complaint lodged against PLAs by both union and merit shop contractors is that contractors are not permitted to participate in crafting and negotiating PLAs with labor unions and owners. Yet, if contractors want to win contracts on a PLA job, they must sign a letter of assent, which is a promise to follow the terms and conditions of a PLA. Construction owners miss a key ingredient critical to the success of a construction project when contractors aren’t part of crafting a contract that controls the efficiency, cost and quality of the labor needed to build a project.

Anti-Merit Shop Provisions in Typical PLAs

PLAs typically include the following provisions that discourage merit shop contractors from working on PLA projects:

Anti-Merit Shop Provision #1 and #2

Article 6.01 – The Employer recognizes the Unions signatory to this Agreement as the sole and exclusive bargaining representatives with respect to rates of pay, hours, and other conditions of employment for the job classifications contained in the appropriate Local Union agreements and Schedule A’s for this Project.

PLAs take away workers’ rights. Workers normally are permitted to choose union representation through a card check process or a federally supervised private ballot election. Likewise, unions are free to join a union at any time by going to a union hiring hall in their respective trade and following the varying procedures to become a member.

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 project – rather than the employees.

PLAs are called pre-hire agreements because they can be negotiated before the contractor hires any workers 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, PLAs strip away the opportunity for construction workers to choose a federally supervised private-ballot election or a card check process when deciding whether or not union representation is right for them.

PLAs force employers and employees to follow inefficient and archaic union job classifications and work rules contained in local union collective bargaining agreements that are deferred to by default when not addressed specifically in a PLA.

Local union work rules and job classifications define how employees are allowed to use materials and operate equipment for job tasks governed by the jurisdiction of each specific trade.  Union work rules prevent the use of an efficient labor utilization strategy used by merit shop contractors called multiskilling, where workers possess a range of skills appropriate for more than one work process and trade jurisdiction and are used flexibly on a project.

This managerial strategy permits workers to be assigned to construction tasks based on their ability to perform the needed skill/task, unrestricted by traditional union job descriptions and work boundaries designed to ignore efficiency and put to work as many union members as possible. Learn more about the efficient advantages of merit shop construction here.

Anti-Merit Shop Provision #3

Article 6.04 – All employees covered by this Agreement shall be required as a condition of employment for this Project only to apply for and become members of and to maintain memberships in the respective Unions, or they may pay and remain current in the payment of such reasonable fees as are established for non-members by each Union…

Nonunion workers are required to pay non-refundable union dues and fees or join a union in order to work on a PLA project.

Anti-Merit Shop Provision #4

Article 7.01. – For Unions having a hiring hall or job referral system in their local agreements, the Employer agrees to be bound by such system and it shall be used exclusively by the employer.

PLAs require merit shop companies to obtain their workers from union hiring halls. This means a merit shop company has to exclude their skilled nonunion employees from specific jobsites and exclusively use unfamiliar union workers.  In other instances, merit shop employers can use limited portions of their own workforce (typically 2 out of ten hires), but they must send those workers to the union hiring hall and hope the union sends the same workers back to that specific jobsite ahead of union members on the out of work bench.

Anti-Merit Shop Provision #5

Article 12.01.a. – The Employer shall make contributions to the established fringe benefit funds in the amounts designated in the appropriate Union agreement and its Schedule A.

Despite the fact that the vast majority of ABC member contractors have their own benefit plans, PLAs require merit shop contractors to pay their employees’ health and retirement benefits to union trust funds, even though their employees – if they are even allowed to use their existing employees –  will never benefit from these contributions unless they join a union and/or meet plan vesting schedules.

Thus, nonunion contractors concerned for their existing nonunion employees have to pay benefits twice: once to the union and once to the company plan.

Politicians and private construction decision makers must realize that when they require a PLA, they are effectively denying benefits to nonunion employees and creating a windfall for union  participants in these plans. It is an unfair redistribution of wealth and will lead to nonunion employees relying on public assistance down the road.

These additional double benefit costs place nonunion contractors at a competitive disadvantage against union contractors that have only one set of benefit costs. Such a disadvantage discourages competition and ultimately increases costs to taxpayers and/or the project owner.

Anti-Merit Shop Provision #6

Article 12.01.c. – When the Employer(s) contribute(s) fringe benefit payments into local, regional, or national trust funds, the Employer agrees to be bound to all lawful terms and conditions of such trust agreements, and all amendments thereto.

Paying into underfunded and mismanaged union pension plans can expose merit shop contractors to massive pension withdrawal liabilities. Depending on the health of a union-managed  multi-employer pension plan, signing a PLA could bankrupt a contractor or prohibit contractors from qualifying for construction bonds needed to build future projects.

Learn more about PLAs and pensions here and read this study by Dr. McGowan

Anti-Merit Shop Provision #7

Article 14.02. – Apprentices shall be utilized in accordance with the Local Union agreements and its Schedule A and applicable law. Apprentices shall be indentured in a program through their Local Union approved by the United States Department of Labor, Office of Apprenticeship Training, Employer Labor Services, (formerly the Bureau of Apprenticeship & Training).

PLAs require merit shop companies to obtain apprentices exclusively from union apprenticeship programs. This means craft professionals enrolled in federal and state-approved apprenticeship programs other than those offered by the union are excluded from working on PLA projects. This provision also eliminates new entrants into the construction industry trained in alternative programs at community colleges, vocational schools, merit-based training programs or employees enrolled in employer craft training programs.

Their is more than one way to train a skilled construction workforce, so why should union apprenticeship programs receive preferential treatment?

Get to know your Project Labor Agreement

As you can see, the restrictive and inefficient conditions and requirements PLAs impose on management and employees discourage merit shop contractors from bidding on PLA projects. That’s why they are called commonly called “union-only” PLAs, even though nonunion firms are permitted to bid on PLA projects (but they can’t win contracts to build the project unless they agree to a PLA).

Public officials such as school board and city council members should solicit public comment about the terms, conditions and language of a PLA from all members of the construction community before agreeing to implement these costly and discriminatory giveaways to Big Labor on projects funded by taxpayer dollars. Likewise, no government body should agree to a PLA without thoroughly reviewing the final agreement.

Soliciting and listening to the concerns of experienced merit shop construction contractors and their skilled employees will help deliver on time and on budget projects using fair, free and open competition, without costly and discriminatory PLAs set-asides.

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36 Responses to Project Labor Agreement Basics: What is a PLA?

Louie July 19, 2010 at 7:09 pm

So regardless the union will get their clause on no-union companies!!

Claire Callahan September 8, 2010 at 7:57 am

This all drives me crazy. It is wrong on all levels. It is not only unethical, and immoral, but illegal. There are so many laws against PLA’s. These politicians, Obama, Deval, and the like, need to do their homework, themselves, and stop buying votes. How about the Right-to-work laws?(copied here)

Right-to-work laws are statutes enforced in twenty-two U.S. states, mostly in the southern or western U.S., allowed under provisions of the Taft-Hartley Act, which prohibit agreements between trade unions and employers making membership or payment of union dues or “fees” a condition of employment, either before or after hiring.

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Travis Post January 10, 2012 at 5:40 pm

We were awarded a contract on a project that has a schedule of two weeks to complete with a labor force of 4 employees due to the PLA we have spent more than 80 hours on paper work alone The union can only supply one employee out of 4 because none of there people want to only work for 2 weeks and get placed at the bottom of the list no my employees have to sign with the union to work we also have to comply with LA local hiring rules for this project and the job is a we build project section 8 So as a merit contractor we are faced with this scenario only hire from the Union that cant supply use employees even for prevailing wage for a job I could send 4 Trained employees to for two weeks and be done we have not even started this project and it has cost are company double ! California is broke for a reason

Brian Soucy January 29, 2012 at 1:31 pm

To Travis:
What you have said makes absolutely no sense. LU Hiring halls, have what is called a short call list. If a job is less than two weeks long, it is considered a short call. When you are dispatched on a short call, you don’t lose your spot in the out of work book. So your statement is makes no sense. Also, if a union is unable to man a job with their members, they are able to hire non-members at any wage necessary.

As for everything else mentioned in this article, I don’t have the time or patience.

I will have to state the primary mission of unions, and the main difference between a union skilled worker and a non-union skilled worker. The main things that unions fight for are Health Insurance and Retirement and Pensions.

There are other goals that the unions try to achieve such as safety and decent pay, but those are not the primary drivers.

Retirement, and health insurance for skilled workers. That is it! Is that such a bad thing?

All this spin lately makes me sick.

scott morse March 1, 2012 at 6:28 pm

The TRUTH PLA s make sure the worker gets a decent fair wage to work on a project does not get taken advantage of by the non Union Contractor this cannot happen to a Union employee because the union makes sure the employee is treated fairly with health insurance and a pension, safe working conditions the project get the best of the best construction people on the planet with extensive training in construction and safety, making a decent wage being able to provide for a family put a child through college and help keep the American dream alive is just some of the reasons P L A sare good.

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Dal G Ferguson April 21, 2013 at 1:51 am

Who is more productive Union vs Non Union ??

700 to 900 job study!! (world why )
if you want to know ..just go to the web site and see 4 your self..
Union 4 to 6 years of schooling for that trade..So, we are much faster!!!

Dal G Ferguson April 21, 2013 at 1:58 am

“A government-mandated project labor agreement (PLA) is an anti-competitive and costly scheme designed by Big Labor and sympathetic public officials”
EAT YOUR WORDS!!! (Best study Non-Union ..back Fire!!…thank you!!)

The Truth “PLA” save Lives, money and Time…

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Paul Izyk March 20, 2014 at 5:47 pm

To the individual who wrote this article. You really need to go educate yourself. Epic FAIL.

Eric February 4, 2015 at 1:55 pm

Dal, beside a well trained workforce, the other unspoken of edge, that union workers have, is the highly selective process to be admitted. Wether for apprentices, or journeymen from the non Union side, unions tend to only take in those who score in the top ten percent on the entry tests and interviews. If any workforce merits its wage, it is the union workers.

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Jack January 9, 2016 at 4:02 pm

I’m all for the good wages and providing health coverage but if I’ve learned anything. 9 out of 10 times when receiving a union worker from the hall, they are worthless. I guess that’s why they don’t let you interview them first. They may be skilled but they do their best to stretch work out making it impossible for the contractors to make money. As I’ve heard to many times…”who cares about the company, I’m in the union. Whatever concessions are make in PLA’s, it’s lost with them knowing they have the job. The complaints about working an 8 hour day makes me crazy. If they cared about doing their job as much as decorating their hard hats, the unions wouldn’t be losing so much ground. Unfortunately NYC will be the last to fall but the nonunion buildings are getting taller everyday. I can write a book on this so one last thought…with OSHA Requirements, stop saying how much safer union labor works…plus I find it funny are racists and will vote republican, which is against their well being.

Jesse August 20, 2016 at 4:54 am

Jack, I’ve been on both sides of the fence, I was non union for the first 15 years of my trade, it took a lot to get used too, but I took it because the benefits, my work hasn’t changed I’m still fast and get the job done, but at the same time as a Foreman I have had to deal with lazy to good to work pre Modena’s, but I seen that as non union workers as well, so I’d rather have a fair wage and real lasting benefits, that I don’t actually have to lose out on getting. And I have taken 2 week jobs and less, but I normally work 7 days a week 12 shifts and don’t slow down until my break; but you don’t have to take my word on this, make the cut try it out for two years, at first I only did it because I couldn’t find a job, because of PTSD, no one wanted to give me a chance.
Trust me I was totally different than than now.

Candice Shaw November 26, 2016 at 9:08 am

Unions make sure greedy companies pay their employees a fair wage including health insurance pensions 401Ks etc

Non union skilled workers get paid what union apprentices make. Apprentices receive years of education & training in their respective fields

There’s power in numbers. Dividing efforts for better wages will result in worsening working conditions and pay.

Right to work = right to work for less

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Rob A December 7, 2018 at 8:34 pm

Why are construction workers not deserving of high wages and benefits?

The conditions we work in from the air to the inherit dangers of heights, electrical hazards, power tools, etc.
The eventual wear and tear on the body from repetitive motions and working in tight spaces with heavy materials, both in the air and on the ground.

The only reason for building is if there is money to be made from the services provided by the structure. The owners will make much more on the services than the cost of the structure.

The real issue is the merchants, specifically contractors. They are the ones who charge many times more than the costs of labor and material. And yet, all they do is facilitate.

They are like landlords who do not fix the problems in the house but charge a fortune because it doesn’t matter as long as the four walls are standing.
(Read “On Trade” by Charles Fourier)

Stop shaming the workers.

Dave Hoover November 27, 2019 at 9:14 am

A PLA is a comprehensive pre-hire agreement that provides owners and contractors access to highly skilled workforce necessary for complex projects.
Establishes the terms and conditions for labor in advance so that contractors are able to make exact bids.
Eliminates cost-overruns and project delays.
Ensures value, quality and cost savings for owners and/ or taxpayers.
Fuels the growth of our communities.
PLAs are especially useful for large, complicated construction projects because they simplify the process and facilitate on-time, on-budget project completion.
Through negotiations, a PLA will establish wages, hours and work schedule before the project begins. PLAs do not hinder competition or restrict bidding to union-only contractors. A PLA is available to any contractor who will accept its terms.
No surprises, no cost overruns, on time and under budget with the work performed safely by well trained construction workers.

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Bill Chamberlain June 2, 2021 at 1:07 pm

PLA’s are not about fair wages, more jobs, fair competition, safer jobsites, on time completion, etc. It is about making sure that the union gets their cut from non-union contractors. We all know union membership has severely dwindled and they needed to find a way to get money, make the rules, and monopolize the construction industry and what better way than a union rigged program that forces companies and workers to pay them if they want to work on public projects. Without the PLA on public works projects a non-union worker would get the prevailing wage rate plus the cash equivalent for benefits. Under the PLA a non-union worker and company essentially has to pay to play. They are forced to join the union for the project and are promised under the PLA to be treated equal to signatory members however the are ostracized and treated horribly. They also are essentially being stolen from as they will never have enough time vested to cash out their pension, vacation, holiday or other benefits paid on the project unless they join the union after the project. If an employer were to take money like this they would be fined and possibly go to jail. Also, being in the union doesn’t make you are better or more skilled worker. It just fills your head with union propaganda and protects you from being fired for being a lazy worker and guarantees you a spot on the out of work list when a job is complete. Thousands upon thousands of public works projects have been successfully completed without a PLA or union dictatorships. There have been no time delays, overruns or budget issues because it wasn’t a PLA. Really though all these jobs are a waste of tax payer money ($700,000+ for a one bedroom low income apartment to be built in LA), and actually slow the job down due jurisdictional disputes and the dispatching requirements for non union and union contractors.

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