The Truth About Project Labor Agreements

Determined to ensure taxpayers get the best construction at the best price, Michigan’s elected leaders enacted legislation in July 2012 (Public Act 238/S.B. 1085) creating government neutrality with regard to project labor agreements (PLAs) on taxpayer-funded construction in the Great Lakes state.

Thirteen other states have enacted similar measures through executive orders or legislation.

However, in 2012, various Michigan construction trade unions benefiting from government-mandated PLAs challenged the law. On November 15, 2012, the U.S. District Court in Michigan issued a preliminary injunction against this law in Michigan BCTC v. Snyder.

TruthAboutPLAs.com readers may recall Michigan adopted a similar bill in 2011, but 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.

Michigan lawmakers amended their statute through the July 2012 passage of Public Act 238 in order to remove all ambiguity and legal snags. The new bill clearly communicated that the intent of the measure is to ensure economy and efficiency in public construction, and that the Michigan law does not infringe in any way on the rights of contractors to voluntarily enter into PLAs with organized labor. Public Act 238 makes it clear that Michigan law simply ensures contractors – not government bureaucrats or elected officials beholden to Big Labor – decide whether PLAs will best serve the needs of the project. The Michigan law, like the similar laws in thirteen other states, takes government out of the business of picking winners and losers based on their labor affiliation.

But the court disagreed again. Even though the amended law neither requires nor prohibits contractors from entering into PLAs, the district court issued an injunction based on an unprecedented expansion of federal labor law preemption of state laws.

Gov. Snyder’s office has appealed both of the district court’s rulings to the U.S. Court of Appeals for the 6th Circuit. ABC and ABC of Michigan have submitted an amicus brief in support of the Governor’s appeal, joined by the National Federation of Independent Business and National Right to Work Legal Defense Foundation.

ABC’s brief asserts that the district court’s ruling is “fundamentally flawed.” As further stated in the brief: “The district court’s holding … ignores or unfairly minimizes the plain language of P.A. 238 and, if allowed to stand, would extend the reach of federal labor law preemption to labor-neutral state legislation in a manner that has never before been countenanced by any court.”

A ruling by the Court of Appeals in this important case is expected later this year.

Representatives of organized labor have legally challenged only four executive orders or statutes enacted that guarantee government neutrality with regard to project labor agreements (PLA). In 2002, the U.S. Circuit Court of Appeals for the Washington D.C. Circuit found in Building Trades Dept., AFL-CIO v. Allbaugh, 295 F. 3d 28 (D.C. Cir. 2002), that Executive Order 13202, which was issued by President George W. Bush in 2001 and banned government-mandated PLAs on federal and federally assisted projects, was not preempted by the National Labor Relations Act. In Sept. 2011, an executive order issued by Iowa Gov. Terry Branstad that banned government-mandated PLAs on state and state-assisted construction projects was upheld by a federal district court based on the precedent set in Allbaugh. Appeals in both cases are exhausted. In 2011, shortly after the district court ruling in Iowa, federal judges in Idaho and Michigan found government neutrality laws preempted by the NLRA. The Idaho case is also being appealed to the 9th Circuit Court of Appeals.

Below is an ABC Michigan press release about the case and here is the amicus brief.

For Immediate Release                           Contact: Chris Fisher, President
January 24, 2013                                       (517) 853-2545 [email protected]

ABC Urges Federal Appeals Court to Uphold  Michigan Fair and Open Competition Law 

Lansing, Mich. – Associated Builders and Contractors (ABC) of Michigan this week submitted an amicus brief with the U.S. Court of Appeals for the 6th Circuit defending Michigan’s Fair and Open Competition Act against a challenge filed by construction unions. The act ensures the nondiscriminatory procurement of state services in the award of public construction contracts.

“ABC of Michigan has long stood for maximum fairness and efficiency in the government procurement process, so that taxpayers are guaranteed the fiscal accountability they deserve on public construction,” said Chris Fisher, president of ABC of Michigan. “We prepared our brief in order to support Gov. Rick Snyder’s strong defense of the Fair and Open Competition Act, which was amended by P.A. 238 last year.

“The federal district judge’s injunction against the amended law at the behest of the Building and Construction Trades unions is in an unprecedented expansion of federal labor law preemption of state contracting rules,” added Fisher. “ABC submitted its brief in support of the governor’s appeal from the decision because the federal district court’s decision is fundamentally flawed.”

“Just as 13 other states have done, Michigan has every right to choose to be ‘labor neutral’ and protect taxpayers from a union-only bias in the award of its construction contracts by neither requiring nor prohibiting any government contractor to sign a project labor agreement (PLA). The district court misapplied well established rules governing federal labor law preemption by effectively forcing the state to impose PLAs on its projects, even if the result would increase the costs of taxpayer-funded construction.”

ABC of Michigan was joined in its amicus filing by ABC National, as well as the National Right to Work Legal Defense Foundation and the National Federation of Independent Business. A decision is expected from the Court of Appeals sometime this spring.

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