South Dakota is the latest state to say “NO” to wasteful and discriminatory project labor agreement (PLA) mandates.
Today, South Dakota Governor Dennis Daugaard (R) signed H.B. 1212 into law, which will prohibit government entities in the state from requiring contractors to sign a PLA, or any other agreement with labor unions, as a condition of performing work on taxpayer-funded construction projects in the state.
South Dakota is the 20th state to take action to protect taxpayers and the vast majority of the construction industry workforce from wasteful and discriminatory PLA mandates. It is the 16th state to enact reform since President Obama issued Executive Order 13502 in February 2009, which encourages federal agencies to require PLAs on federal construction projects costing more than $25 million and allows state and local governments to require PLAs on federally assisted projects.
A PLA is a special interest scheme that discourages competition from qualified contractors and their workers by requiring a construction contract to be awarded only to contractors and subcontractors that agree to recognize unions as the representatives of their employees on that job; use the union hall to obtain workers; obey the union’s restrictive apprenticeship and work rules; and contribute to union pension plans and other funds in which their nonunion employees will never benefit unless they join a union.
When a government entity requires a PLA on a construction project, they are essentially tilting the playing field in favor of contractors that agree to use organized labor. On government-funded or assisted projects in South Dakota, this means that the 98 percent of the state’s private construction workforce that chooses not to join a labor union cannot compete on an equal basis for projects funded by their own tax dollars.
PLAs and other union-only mandates have been found to increase construction costs by an average of 12 percent to 18 percent—and much more in some cases.