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Project Labor Agreements

A government-mandated project labor agreement (PLA) is an agreement that the public-owner has negotiated with organized labor and then imposes on contractors and subcontractors on a publicly-financed construction project.  PLAs typically restrict the majority of employment on the project to only those workers whom unions are willing to refer to the project.  The negative impact of PLAs falls on union contractors, non-union contractors, small companies, and disadvantaged businesses.  For instance, in 1998, US Congress heard testimony from women and minority-owned businesses that were excluded from contracting opportunities by PLAs.  But mostly, the taxpayer takes the brunt of the impact of a PLA.

PLAs typically require that all employees are referred through the union, designate the union as the sole representative of the employees, and require contractors to contribute to union fringe benefit funds.  PLAs effectively force open-shop contractors and their employees to unionize without regard to their preferences or an opportunity to vote.  Furthermore, PLAs force union contractors to work under different work rules and other contract terms that government bureaucrats have negotiated, rather than under the existing labor contracts that they or their agents have negotiated.

Organized labor will argue that PLAs are a legitimate and proper use of governmental power.  In return for a government mandated PLA, unions typically agree to “labor peace” and to complete the work in a timely manner without union “strikes” or illegal work stoppages.  While the Iowa Supreme Court ruled in MBI vs. Polk County that the Iowa Events Center PLA is legal, MBI remains opposed to any public-sector measure that would give a preference to either open-shop or union contractors, or disrupt the collective bargaining process.  This includes any measure that would mandate project labor agreements on publicly-assisted projects.