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.
TheTruthAboutPLAs.com 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.