Mass Lawmakers Give Project Labor Agreements the Green Light After Legal Defeat and Bad Press
Massachusetts lawmakers have passed legislation giving local and state government stakeholders the green light to mandate anti-competitive and costly project labor agreements on taxpayer-funded construction projects. The legislative maneuver follows a decision from a Massachusetts court that struck down a government-mandated PLA for violating state competitive bidding laws.
On November 14, 2024, Massachusetts lawmakers approved the “Mass Leads Act,” an economic development omnibus authorizing $4 billion in spending on a cascade of esoteric pork, including “climatech” initiatives, “quantum innovation,” “AI hubs,” and “regional resilient and sustainable food innovation.”
Buried at line 6626 of the 320-page bill was House lawmakers’ response to a May court ruling enjoining the Springfield Water and Sewer Commission’s union-only PLA on a $256 million water treatment plant (the lawsuit was covered here by TheTruthAboutPLAs.com).
Springfield’s PLA debacle and related court ruling led to a scathing Boston Globe editorial titled, Project Labor Agreements Are Bad Public Policy partially excerpted below:
It’s one of the most predictable of economic impulses. Facing competitive pressure? Then try to limit the competition.
With labor unions in Massachusetts, one oft-attempted approach has been to pressure public-sector decision-makers to impose so-called project labor agreements on public projects. Although they don’t say so explicitly, PLAs in effect limit public work only to firms whose workers belong to trade unions.
Such agreements usually drive up costs for the taxpayer.
In broad terms, the public policy dance goes this way. In deciding what candidates to endorse and help in their bid for office, labor unions solicit their support on various labor issues, one of which is usually PLAs. Democratic politicians almost reflexively sign on. Then, when a sizable project comes up, unions urge their friends in public office to press the decision-makers to impose a PLA on the project. Since offering such a public statement is easy, the electeds usually do. If the contracting agency then does as urged, a PLA is imposed — and nonunion firms’ only resort is to go to court to fight it.
All that just happened in Western Massachusetts. After the urging of an array of elected officials, the Springfield Water and Sewer Commission imposed a PLA on a $325 million water-filtration project in Westfield. Several umbrella organizations for nonunion construction firms filed a lawsuit challenging the PLA.
This month, Hampden Superior Court Judge Michael Callan blocked the competition-constricting requirement, noting that the state’s Supreme Judicial Court has said that for a PLA to be permissible, a project must be of “such size, duration, timing, and complexity that the goals of the [public] bidding statute cannot otherwise be achieved’’ and that the awarding authority must have undertaken “a careful, reasoned process’’ to assess the effects of a PLA in regard to the intent of that law.
Those standards simply weren’t met, Callan ruled.
In fact, Callan noted, the firm that the water and sewer commission consulted with had concluded a PLA would delay the project by several months and hike its costs by $15.5 million. Indeed, there really hadn’t been any strong policy argument for the PLA. The commission’s own legal counsel, before having a late-in-the-process change of mind, had advised that he didn’t think the project met the SJC’s threshold for the imposition of a PLA.
The judge’s clear-eyed decision also pierced through much of the disingenuous rhetoric about PLAs, writing that “for all intents and purposes, the PLA excludes open shops from bidding, as it essentially requires bidders to … use union laborers on the project.’’
That’s exactly right. And limiting the bidding only to union labor hikes project costs. Such a price-increasing effect is a generally recognized impact of constricted competition. It pertains in particular when nonunion firms have been eliminated from even bidding on the project; if unionized firms know their only rivals for a project are other union firms, they will feel significantly less pressure to take a sharp pencil to their bid.
It appeared Massachusetts taxpayers dodged a bullet when the state Senate didn’t take up the pro-PLA legislation passed by the House in the waning moments of the legislative session following an intense lobbying campaign from Mass. construction unions and their chums in government.
Rep. Marjorie Decker, lead sponsor of project labor agreement legislation in the House, stands with union leaders ahead of a rally on the State House steps Wednesday, June 26, 2024.
A counter campaign by ABC and pro-taxpayer groups was supported by local media editorial boards like this gem of a headline from Masslive.com, Mass unions want exclusive access to big public projects. Bad idea.
Unfortunately, despite the bad press, Massachusetts lawmakers eventually caved to special interests and passed a law that effectively nullifies the judge’s decision.
It’s a shining example of how PLA mandates are inherently rooted in political paybacks to labor unions instead of looking out for taxpayers, the public interest and the principles of free enterprise.
The enacted language provides that, “notwithstanding” Massachusetts competitive bidding law, “a public agency or municipality may require a project labor agreement on contracts for public works construction,” provided a determination is made considering the PLA’s effects on construction efficiency, labor supply, safety, the expansion of registered apprenticeship programs, and opportunity for women, minority, and veteran workers.
The authors of the “notwithstanding” clause are amply justified in their concern that application of the competitive bidding statutes might interfere with procurers’ exercise of their new statutory authority; as the Springfield Water lawsuit’s decision found, “the purpose of the competitive bidding statutes is transparent: to ensure that the awarding authority obtain[s] the lowest price among responsible contractors and to establish an open and honest procedure for competition for public contracts.”
Because more than 80% of Massachusetts construction workers, including the vast majority of Massachusetts minority contractors, are not affiliated with a union, it is plainly impossible to reconcile union-only PLAs with open, honest, and competitive procurement. To the extent that the “extensive lobbying efforts by union representatives” discovered by the Springfield Water court also operate in the Massachusetts legislature, it is understandable that the Mass Leads Act authors would immunize future local PLAs from pesky procurement code provisions designed to “promote integrity and public confidence in government.”
Perhaps it is no coincidence that Massachusetts recently ranked among the top states for union political contributions, with candidates raking in nearly $5 million in electoral contributions from public employee unions alone, 96% of which favored Democrats.
ABC of Massachusetts continues to vigorously promote far and open competition for public projects and protect Massachusetts construction workers and taxpayers from discriminatory PLAs.