The Truth About Project Labor Agreements

The Washington Times covered President Obama’s Executive Order 13502 and the bid protest filed this week with the Government Accountability Office by North Branch Construction, a Concord, N.H.-based general contractor and member of ABC (“Obama Puts Union Strings on Federal Jobs,” 10/7).

The focus of the bid protest is a government-mandated project labor agreement (PLA) on the U.S. Department of Labor’s Job Corps Center in Manchester, N.H. 

Delivering on President Obama’s promise to boost the labor movement, the administration has announced a $35 million federal construction project in New Hampshire that requires union representation for the workers and forces nonunion employees to pay dues and contribute to a union pension fund.

Mr. Obama issued an executive order in the first weeks of his presidency that would make the requirement, known as a “project labor agreement” or PLA, the norm for all government contracts on large-scale construction jobs. The order is under review and a final rule is not expected for months, but that did not stop the Labor Department from rushing to use a PLA to build its new Job Corps Center in Manchester, N.H.

The reporter covers points of contention in a typical PLA debate.

Critics say imposing the union-friendly rules on the New Hampshire job – the first federal construction contract with such stipulations since President Clinton was in office – will drive up costs, delay the project and force most of the workers to pay union dues and pension contributions for which they likely will never receive benefits.

Big Labor’s PLA advocates respond with this haggard and bogus argument.

Union officials argue that PLAs, which incorporate collective bargaining agreements into the contract, ensure the construction companies hire highly skilled workers and pay them fair wages.

“Rather than all the money going to the contractor profit, a fair share goes into the worker’s paycheck,” said Greg Denier, communications director for Change to Win, a coalition of unions that includes the Laborers’ International Union of North America.

This argument in favor of PLAs is a poor one, especially because there is already a prevailing wage law, independent of PLAs, that requires employees to be paid a “fair wage” on federal construction projects.  “Prevailing wages” are almost always the union wage and benefit rate and 32 states and D.C. have prevailing wage laws that are similar to the federal prevailing wage law known as the Davis-Bacon Act.

Then Brett McMahon of ABC Member Miller&Long Concrete points out a major objection to PLAs by non-union contractors and non-union employees.

“In order to go to work, you have to pay for it,” Mr. McMahon said. 

On a PLA project, workers have to pay dues to a union in order to work on a project paid for by their own tax dollars (New Hampshire is not a Right-to-Work State, FYI). 

In addition, as TheTruthAboutPLAs.com has covered many times before in this blog (here), in rare instances where non-union workers and their employers participate in PLA projects, all employer contributions to union-managed pension and benefit funds on behalf of non-union employees are forfeited to the union plans unless employees join a union and become vested. It is a windfall for Big Labor because they don’t have to pay benefits to those contributors and non-union workers receive no benefit.

How is requiring a non-union worker to pay dues to a union with no benefits unless they join union for the life of a taxpayer funded construction project sound public policy?