Why Project Labor Agreements are Bad Public Policy (PDF)

A Project Labor Agreement (PLA) is a union-only contract negotiated between a public construction owner and a group of labor unions, usually the local building trades council, which requires the project be awarded only to contractors who agree to:

• recognize the unions as the representatives of all employees on the job;
• use the union hiring hall to obtain all or most of the workers;
• require all workers on the job to pay union representation fees, dues and/or assessments; pay union wages and benefits; pay into union benefit trusts even if the contractor has other benefit plans in place and the employee will not receive payments from those union trusts;
• and obey the union’s restrictive work rules, job classifications and arbitration procedures.

Apprenticeship Requirements

ABC supports apprenticeship but opposes apprenticeship requirements. The unions also pressure public owners to adopt a requirement to use a certain percentage of state-approved apprentices on their projects. While promoting apprenticeship is a good policy, the real reason for an apprenticeship requirement is to restrict competition. This requirement decreases the ability of open-shop contractors to bid competitively on a project. There are only a handful of open-shop state-approved apprenticeship programs that could serve open-shop contractors on public projects.

The labor unions, until very recently, controlled the state approval process through their domination of the Washington State Apprenticeship & Training Council. For years this council had promulgated rules that discriminated against open-shop training programs. The U.S. Department of Labor (DOL) performed a compliance audit and, finding the state out of compliance with federal law, recommended changes required for continued federal recognition of the state apprenticeship council. While the state has amended its apprenticeship laws, DOL still has enough concerns about how the new laws are being implemented that they have not yet found Washington to be in compliance. The unions continue to use every means to oppose the approval of open-shop programs, filing seemingly endless appeals once the council has approved open-shop programs. Because of the length and cost of the legal battles to gain approval, there are far fewer open-shop apprenticeship programs. Until true equality is reached, apprenticeship requirements are just another competition-limiting tactic by the unions to gain market share over open-shop contractors – and raise public construction costs at a time where every dollar must be spent wisely.

Labor Harmony Clauses

Labor harmony clauses have popped up in several King County contracts lately, and we expect to see them elsewhere soon. These clauses, which are usually included in contracts or the addenda, are disguised as strike protection, but in fact, hold the contractors on the project financially responsible for any slowdowns and stoppages on the project regardless of if the slowdown was a result of your actions. The cause can be either direct or indirect, but you may remain in breach of contract.

Note: ABC was successful in asking King County to remove labor harmony clauses from construction contracts in early 2005. Please contact ABC if you observe labor harmony clauses in other construction contracts.

In Summary...

The members of ABC firmly believe that public projects should be bid and awarded to the lowest responsible bidder. ABC believes public owners would be best served by encouraging bidding by the widest number of contractors. It is in all owners’ interests to keep the doors open to all workers. If the work is openly bid without artificial restrictions – including PLAs, labor harmony clauses and apprenticeship requirements -- then all contractors have an opportunity to be awarded the work and all employees have an opportunity to be employed and trained on jobs that their taxes pay for.

If you would like more information about any of the topics discussed here, contact Aran Buchan.