Project Labor Agreements

A Project Labor Agreement (PLA) is a contractual agreement resulting from a pre-hire collective bargaining between a contractor and labor unions concerning a distinct construction project.Under the National Labor Relations Act, construction contractors and workers have the freedom to decide whether to unionize or not to unionize. The vast bulk of contractors and their workers – more than 80 percent – have willingly opted against unionization.

Because most contractors and workers prefer to abstain from unionization when they have the free choice, Big Labor shifted to politicians to vacate that choice and set union representation on workers from the top down. The process by which this is done is a project labor agreement, which is often referred to as a “PLA.”

A project labor agreement requires all contractors, whether they are unionized or not, to subject themselves and their workers to unionization to work on a government-funded construction assignment. This is done by enclosing a union collective bargaining contract in a public construction project’s bid specifications. A contractor must sign the agreement and subject its workers to union control to receive a contract.

Project labor contracts usually require contractors to give union officials a monopoly on bargaining privileges over all employees. They use exclusive union hiring halls, force workers to pay dues to keep their jobs, and pay above-market prices resulting from extravagant work rules and featherbedding.

The use of a project labor contract usually results in cost overruns and higher construction expenses for taxpayers. Qualified non-union contractors who wish to make lower-cost bids, and workers who want to work non-union, are shut out of the undertaking. However, politicians and government officials continue to assess project labor contracts to award the union officials that fund their political campaigns and keep them in power.

Some levels of government have taken action to stop acrimonious project labor arrangements. President Bush signed an executive order forbidding federal agencies and other entities receiving federal aid for construction projects from using PLAs. Montana and Utah have passed similar legislation restricting government-mandated project labor agreements.

Even under a project labor agreement, workers do retain some rights:

1. All workers have the freedom to abstain from being a full union member and to pay either no or reduced union dues, depending on the state in which they work.
2. If the PLA requires all workers to be employed through an exclusive union hiring hall, the hiring hall may not discriminate between the union and non-union workers.
3. While a PLA may require union representation on a certain public construction assignment, this forced representation does not automatically spread to other assignments a contractor works on.

The PLA summarizes the privileges and obligations of each party relating to a variety of operational interests during the assignment, including worksite conditions and procedures for resolving work stoppage.

Before starting the project, the unions determine the wages and benefits to anyone who works on the project. This means that the agreement applies to workers hired by the contractor and those employed by the subcontractor. The contractor(s) will sign the PLA with the relevant union organizations before breaking ground on the task.

How Are Project Labor Agreements Regarded in the Construction Industry?

Advocates claim that PLAs lessen the risk of construction and repair projects being granted to corrupt contractors and eliminate the cost to taxpayers for overruns caused by labor conflicts.

They explain that cities that use PLAs to award construction agreements can cut costs by decreasing construction pauses. They also claim PLAs help provide project continuity by including conditions to prevent work deficiencies and address labor conflicts.

They also concentrate on the workforce objectives of PLAs to improve construction jobs for specific groups of individuals. Ultimately, supporters of the use of PLAs conclude that they deliver a fair chance for unions to bid on projects by agreeing to the terms of the PLA.

Contrarily, those who oppose PLAs claim that they restrict competition by preferring union workers over non-union workers. This may result in unskilled workers, leading to inflated construction expenses.

Additionally, they argue that PLAs practically force the creation of de facto unions, whereby project owners are mandated to follow union rules, including those concerning wages and benefits, representation and payment of union dues and fees.

Finally, PLAs prioritize community workforce goals (i.e., hiring local workers, women and racial minorities, veterans, homeless, and economically disadvantaged individuals), even when decreasing the pool of qualified workers.

How Are Project Labor Agreements Being Challenged Legally?

In 2009 a federal executive order was administered to encourage federal agencies on a case-by-case basis to consider using PLAs on large-scale construction projects. Various organizations have challenged that order over the years.

PLAs have been legally contested because they are preempted under the National Labor Relations Act of 1935 (NLRA). The NLRA was legislated to safeguard workers’ and employers’ rights and promote collective bargaining.

The NLRA makes it unlawful for employers to discriminate against or terrorize workers based on union activities and membership. It also covers workers who do not belong to unions but engage in other collective, protected activities (i.e., two or more workers discussing pay or work-related matters with their employer).

Legal challenges under the NLRA to public construction projects operating under a PLA have also been proclaimed on the ground that the government awards these agreements solely to unionized construction firms.

The assertion is that the NLRA provides construction contractors the freedom to unionize or not, and PLAs damage that right by requiring unionization to bid on a project successfully. The PLA does this by retaining union collective bargaining provisions and, by signing the PLA, the contractor must agree to subject itself and its workers to union rules.

PLAs also have been contested for violating state and local competitive bidding requirements. Whether PLAs have been successfully contested depends on the court’s evaluation on a case-by-case basis, considering the project’s size, sophistication, and fulfillment schedule and the state and local objectives in requiring the use of PLAs.

Are There Disadvantages for Non-Unionized Entities to Utilize PLAs?

Again, non-unionized businesses that enter into a PLA may be mandated to perform specific union objectives. Those might include requiring the non-unionized business to:

• Seek referrals for new employment at union hiring halls;
• Pay suggested union benefits and salaries; and
• Adhere to regulations under the PLA regarding settling conflicts relating to the construction project.

Are There Benefits for Non-Unionized Entities to Use PLAs?

A PLA can deliver the following benefits for the construction owner or contractor:

• Increased participation for otherwise underrepresented groups and local residents through apprenticeship programs;
• Bargained-for stability through anti-strike and lock-out requirements;
• Added cost motivations for project owners; and
• Maximized costs by designating fixed rates and deadlines for the project duration

Should I Seek an Attorney’s Advice Regarding a Project Labor Agreement?

Consider getting the assistance of qualified labor and labor lawyers before you enter into a PLA. An attorney will help you understand your rights and responsibilities under the PLA. They can also provide advice if you believe the construction project owner has violated the terms of a PLA into which you have entered. Use LegalMatch to find the right lawyer for your legal needs. There is no fee to schedule a consultation with a labor lawyer near you.