Project Labor Agreements

Photo of a handshakeFrequently Asked Questions

1. What is a Project Labor Agreement (PLA)?

A project labor agreement (PLA) is a construction labor agreement between an owner and a regional building trades council, representing all the construction craft unions in a given geographical area.

PLAs are agreements that establish uniform terms and conditions for all construction craft employees, as well as all construction contractors on a specific construction project. Each PLA is specific to one project only.

PLAs are particularly useful on large, complex construction projects that require a large number of skilled craft workers, and that are expected to last a long period of time, and on projects that are particularly time-sensitive.

2. Is a PLA a trade-off of union wages for a non-strike guarantee?

Though PLAs are often touted by opponents as simply a trade-off between a construction owner and the unions of union wages for a no-strike guarantee, they are really much much more than that. A PLA is a comprehensive agreement between the unions and an owner, which establishes uniform standards to which all participants in the construction process must conform.

A typical PLA will establish uniform standards for working hours, overtime, holidays, grievance procedures, drug testing, jurisdictional dispute resolution, etc. These are areas that generally differ from craft to craft, and from contractor to contractor on a typical construction project, and it is the responsibility of the owner, or of its construction manager, to coordinate the project as efficiently as possible.

Construction projects have been compared to a symphony orchestra, with 21 different musicians, playing 21 different instruments from 21 different sheets of music. The construction manager is like the conductor of the orchestra, trying to harmonize the orchestra into one pleasing piece of music. The construction manager must try to coordinate the project into an efficient and effective construction effort. PLAs give them an effective tool to do so.

3. Do PLAs raise the cost of construction by establishing a wage level?

The establishment of a wage level is only one part of a PLA. Wages only represent a fraction of the overall cost of construction. Many other factors are as important to the overall cost of a project, including efficiency and quality of construction. Delays create one of the largest single cost items in construction.

While PLAs cannot entirely eliminate delays in construction, an ironclad no-strike, no-work stoppage agreement can eliminate any delays attributable to labor. This is no small matter, considering that during the term of many large construction projects, several area collective bargaining agreements could expire, and strikes could potentially stop construction in a given area for weeks at a time. It is also no small matter when one considers the fact that most large construction projects have a mixture of union and nonunion workers, and there are potential sources of friction that can lead to picketing activity, etc., which could have a delaying effect. PLAs offer an opportunity for union and nonunion workers to work side-by-side on a project in harmony.

PLAs do not increase the cost of construction, delays increase the cost. PLAs ensure the owner that there will be no delays attributable to labor for the duration of the project.

4. Why do PLAs require hiring through union hiring halls?

Union hiring halls present the most effective and efficient method of hiring quality local employees. A construction owner has access to the best training, and the most highly skilled and experienced construction workers in the area through this method of hiring. Union hiring halls provide a much superior method of hiring quality employees than newspaper advertising, temporary replacement agencies, etc., and they provide the best assurance of employing local workers, who have a stake in the overall outcome of the project.

5. Do PLAs reduce the pool of qualified bidders for a project?

PLAs do not reduce the pool of qualified bidders for a project. On the contrary, independent studies by the California Research Bureau and the UCLA have indicated that this claim was roundly rejected by construction officials interviewed for the studies. These same studies confirmed that non-signatory contractors constituted 2/3 of the contractors working on the projects studied.

6. Are PLAs a new phenomenon?

PLAs have been utilized as an efficient construction tool in private industry for many years, and they have been used in federal sector construction as far back as the 1930s. Many state and local governments, unfortunately, have been reluctant to avail themselves of all the same tools that the sophisticated construction users in private industry have recognized and utilized for a long time.

Only in the last 10 years or so has the issue of public works PLAs become an issue of debate. In the State of Minnesota projects such as; Ramsey County Jail, Minneapolis Convention Center, U of M Duluth, Rochester Civic Center, 188th Air Guard Maintenance Building, Mall of America, St. Paul Technical College, Arial Lift Bridge, Tunnel connection, Minneapolis School District, St. Paul Public Schools, Duluth School District, Federal Courthouse, Hennepin County Courthouse, Great Aquarium-Duluth, MN Dept of Revenue Building, Mounds view & Stillwater Schools, Federal Reserve Bank, and School District 622, have all been successfully completed on-time, on-budget under PLAs. Plus, over the years, many, many more – too many to mention, in school districts, counties and cities throughout the state.

7. Does a PLA constitute a “union-shop” agreement?

A PLA is not a “union shop” agreement. Bidding is open to all contractors, and employment is open to all construction craft workers. PLA’s can actually be most beneficial to nonunion construction craft workers, as they are afforded an opportunity to work on some projects on which they may not have had the opportunity without a PLA, and on the PLA project, they will be guaranteed a fair wage.

8. Does a public PLA violate Minnesota’s public bidding statute?

Minnesota’s public bidding statute requires that all public construction contracts be awarded to the lowest responsible bidder. Public PLA’s do not discriminate against any bidders, nor do they prohibit the awarding body from awarding the contract to the lowest responsible bidder. They simply require that all bidders must adhere to the standards to which the public body has agreed in the terms of the PLA. It is then the choice of the prospective bidder whether or not it chooses to bid the project with the set standards. Bidders are free to choose whether to subject themselves to the standards of the PLA project, or to bid on other projects without PLA’s instead, just as they would choose whether or not to bid any other project with any other specific bid specification. The choice lies entirely with the bidder.

It is interesting that people who threaten lawsuits because they believe PLA’s to be illegal, but at the same time, they are asking that the Legislature pass legislation to outlaw them. Which is it? Are PLA’s illegal or does the opposition just want to make them so?

In recent history, the Iowa and Ohio Supreme Courts weighed in on this issue quite decisively. The courts determined that the PLA did not violate public bidding statutes. The courts also determined that the PLA was not preempted by the National Labor Relations Act or the Employee Retirement Income Security Act as had been claimed. An additional claim that the PLA violated the constitutional right of freedom to associate was also found to be without merit.

9. Are public PLA’s legal in other states?

PLA’s have been determined to be legal in other states by an overwhelming majority of court cases (at least 32 out of 40). They have been endorsed by Republican Governors in New York and Connecticut.

These cases represent a cross-section of the United States, from Massachusetts to California, including right-to-work states.

The United States Supreme Court has held that state and local governments can utilize PLA’s for public improvement projects (Building & Construction Trades Council of Metro Dist. V. Assoc’d. Buildings & Contractors of Mass./R.I., Inc. U.S. 218 1993).

10. Who benefits from a PLA?

Everyone associated with the construction process benefits from a PLA. Project owners are facilitated with sound project planning with predictable labor costs. Timely and successful project completion is ensured with an adequate supply of skilled craft personnel for all trades for the full term of the project. Labor peace and stability are guaranteed through mandatory grievance procedures and no-strike, no lockout provisions. All contractors and craft workers are required to perform under uniform conditions of employment.

In addition to the owners and the construction managers, the employees on the jobsite will also become beneficiaries to PLAs. Included in the beneficiaries, in no small way, are the nonunion workers who may have the opportunity to work on the project. These workers will enjoy an equal opportunity to work for fair wages and benefits.

The taxpaying citizens of a government entity are also beneficiaries to PLAs, inasmuch as they will gain a public improvement project that is much more likely to be completed on time, within budget and with quality construction.

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