The Truth About Project Labor Agreements

Determined to ensure that taxpayers get the best construction at the best price, Michigan’s elected leaders have again enacted legislation (Public Act 238) that will ensure government neutrality with regard to project labor agreements (PLAs) on taxpayer-funded construction in the Great Lakes state.

Although Michigan adopted a similar bill in 2011, a federal district court judge invalidated it in February 2011, claiming the law was an attempt to regulate labor policy as opposed to determining how the state procures construction services.

The new law removes all ambiguity and makes it abundantly clear that the intent is to ensure economy and efficiency in public construction. It does not infringe on the rights of contractors to use PLAs; it simply ensures contractors – not government bureaucrats or elected officials beholden to Big Labor – decide whether a PLA is appropriate. The law takes government out of the business of picking winners and losers.

This law is particularly important, as a number of public entities in this state have required the use of PLAs as a condition of performing public work in the past.

In a state where many communities are still struggling to break free from the negative impacts of onerous public sector union contracts negotiated by union bosses and the politicians they support, the legislature’s commitment to cost-effective and quality construction without union favoritism is a great example that the state’s political subdivisions should follow.

Here is the press release from ABC of Michigan:

ABC applauds signing of bill ending construction industry discrimination and providing fiscal accountability in Michigan

Lansing, MI—Today Governor Rick Snyder signed into law Public Act 238 again making government mandated project labor agreements (PLAs) that discriminate on the basis of labor affiliation illegal in Michigan.

“Today is an important day for all Michigan workers and taxpayers,” said Chris Fisher, president of ABC of Michigan. “This law means that all businesses and all workers—union and nonunion alike—have a level playing field to compete for and build publically-funded construction projects and ensures that nobody is denied a fair shot at succeeding in Michigan.”

New changes to the Michigan Fair and Open Competition Act specify that contractors may enter into a PLA only if doing so is voluntary and not mandated. On taxpayer-funded construction projects, a mandate that requires or prohibits contractors to sign a union-favoring PLA or other agreement as a condition of performing work is illegal. In addition, any term discriminating on the basis of labor affiliation is illegal. The law requires the neutral, economical, nondiscriminatory and efficient procurement of construction services by the state.

“This major reform protects citizens with transparency in governmental contracting and defends taxpayers against costly special interest handouts that eliminate competition when public money is at stake,” Fisher explained. “As of today Michigan is again a national leader joining with more than a dozen other states that are promoting construction industry competitiveness, growth and opportunity.”

In early 2012, a Federal District Court judge made a controversial decision to suspend the Michigan Fair and Open Competition Act. Public Act 238 creates new protections that are not affected by the court’s previous ruling.

“We commend Governor Snyder, bill sponsor Senator John Moolenaar, and the legislature for standing up for Michigan citizens and for their staunch support of fiscal accountability and equal opportunity,” said Fisher.

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ABC of Michigan, a statewide trade association representing the commercial and industrial construction industry, is dedicated to quality, open competition, equal opportunity and accountability in publicly and privately funded construction projects.

Michigan is the 14th state to ban government-mandated PLAs on taxpayer-funded projects within the state. Here at TheTruthAboutPLAs.com, we bet there are more to come.