The Truth About Project Labor Agreements

On May 26, 2015, the West Jefferson Hills School District (WJHSD) Board voted 7-1 to require a project labor agreement (PLA) on construction contracts to build a $100 million high school south of Pittsburgh.

After learning about this discriminatory PLA mandate, on August 18, 2015, the ABC Western Pennsylvania Chapter wrote this letter to WJHSD board members to expose how the PLA may be a scheme between some board members and construction union lobbyists to steer taxpayer-funded contracts to unionized contractors and create construction jobs almost exclusively for unionized construction workers, at the expense of everyone else.

Today, only 13.2 percent of the U.S. construction workforce belongs to a union, according to the Bureau of Labor Statistics. Membership is slightly higher in Pennsylvania, where 19.2 percent of the construction workforce belongs to a union. As a result, construction trade unions have turned to their friends in government to mandate PLAs on public projects to help regain lost market share and increase union membership.

Union lobbyists contend PLAs—master collective bargaining agreements with multiple construction unions governing a construction project—are a tool to prevent union strikes, ensure the use of local labor and deliver WJHSD projects on time and on budget. But the truth is these goals already are achieved without PLAs. PLAs contain anti-competitive and costly terms and conditions that favor union interests and hurt the local construction industry and taxpayers.

While all contractors are technically free to bid on construction contracts subject to a government-mandated PLA, the terms of a PLA require contractors to replace most or all of their existing employees with union members dispatched from union hiring halls, use apprentices exclusively from union training programs, follow inefficient union work rules and pay into union benefits plans even if firms have existing benefits plans. Additionally, nonunion tradespeople are forced to pay union dues and they forfeit benefits earned during the life of the project unless they join a union and become vested in union benefit programs.

Qualified local businesses and construction professionals can’t win a contract and work on a jobsite unless they agree to these union terms. It’s no surprise such red tape and discrimination discourages competition from experienced merit shop firms and well-trained nonunion craft professionals in Pennsylvania.

Fewer bidders, coupled with costly and restrictive provisions in PLAs, needlessly increase construction costs. Academic studies by the Beacon Hill Institute at Suffolk University found school projects subject to PLAs were 12 percent to 18 percent more expensive than projects not subject to PLAs, even when both sets of data were subject to prevailing wage requirements.

Can WJHSD taxpayers really afford such waste? Are taxpayers willing to forego other projects, programs or improvements simply because of a PLA giveaway?

Increasing costs, chilling competition, placing barriers to new jobs for qualified local residents and rewarding well-connected special interests with government contracts is no recipe for economic development in the WJHSD region.

Concerned taxpayers should contact WJHSD board members and urge them to proceed with procuring WJH school construction contracts free from costly PLA mandates and in the spirit of fair and open competition. Doing so will help WJHSD board members keep jobs local and provide taxpayers with the best possible construction product at the best possible price.

West Jefferson Hills School District Board Members