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Understanding Project Labor Agreements (PLAs) Event Date.

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Presentation on theme: "Understanding Project Labor Agreements (PLAs) Event Date."— Presentation transcript:

1 Understanding Project Labor Agreements (PLAs) Event Date

2 Q: What is a PLA? A: A PLA is a contract.

3 Q: What is a PLA, really? A: Big Labors tool to create a virtual monopoly on construction jobsites by reducing competition from quality nonunion contractors.

4 Q: But how does a PLA reduce competition? I thought anyone can bid on a PLA? A: Typical provisions in PLAs discourage MOST merit shop contractors from bidding on PLA projects because they hurt construction employees and their employers.

5 How PLAs harm nonunion employers and employees. PLAs take away construction employees rights to elect union representation. X

6 How PLAs harm nonunion employers and employees. PLAs force employers and employees to follow inefficient and counterproductive union job classifications and work rules contained in local union collective bargaining agreements. This adds additional costs and is a source of frustration for employees and management.

7 How PLAs harm nonunion employers and employees. PLAs require contractors to obtain employees from union hiring halls.

8 How PLAs harm nonunion employers and employees. Nonunion employees are required to pay non-refundable union dues and fees or join a union in order to work on a PLA project.

9 How PLAs harm nonunion employers and employees. PLAs require non- signatory contractors to pay their employees health and welfare benefits to union benefit funds. Nonunion employees LOSE this money.

10 How PLAs harm nonunion employers and employees. Multi-Employer Pension Fund Liability PLAs force contractors to pay into underfunded and mismanaged multi-employer union pension plans that can expose merit shop contractors to pension withdrawal liabilities that can put a company out of business. Workers lose too.

11 How PLAs harm nonunion employers and employees. PLAs typically require merit shop companies to obtain apprentices exclusively from union apprenticeship programs or SAC or BAT approved programs. Places contractors at a competitive disadvantage and reduces employment opportunities for new entrants into industry.

12 Q: How do anti-competitive PLAs impact the pool of available bidders?

13 PLAs Reduce Competition Union Membership in 2009 XX Private Construction Workforce Source: Union Membership and Coverage Database January 2010,

14 PLAs Reduce Competition Source: Union Membership and Coverage Database January 2010,

15 PLAs Reduce Competition Source: Union Membership and Coverage Database January 2010, State Total Workers Union % Nonunion % State Rank by % Union Total Nonunion Total State Rank South Dakota16, ,29315,24347 Iowa58, ,07146,86918 Minnesota96, ,11866,99711 Nebraska30, ,80126,80636 North Dakota16, ,27013,97943

16 PLAs Reduce Competition Union Membership in 2009 U.S. Private Construction Workforce Source: U.S. Department of Labor (DOL) Bureau of Labor Statistics. January 2010,

17 Three Ways PLAs Increase Costs Labor Costs Inefficient Union Work Rules/Productivity Double Health and Pension Costs to Nonunion Contractors Competitive Costs Economic Theory in Competitive Construction Bidding: Correlation Between Less Competition and Higher Labor and Construction Costs What is the PLA Cost Premium? PLAs Increase Costs Between 12 Percent and 18 Percent Studies Available at

18 The Results of PLAs in Your Community


20 PLAs are special interest handouts that deny taxpayers the accountability they deserve from government. PLAs Waste Taxpayer Dollars

21 Union-Only PLAs discriminate against minority- and women- owned businesses and their diverse workforce. PLAs Discriminate

22 PLAs amount to de facto segregation … African-American workers are significantly underrepresented in all crafts of construction union shops... this problem has been persistent during past decades and there appears to be no type of improvement coming... PLAs are anti-free-market, non-competitive, and, most of all, discriminatory. National Black Chamber of Commerce WCOE opposed federally mandated project labor agreements … PLAs will disproportionately impact small business, particularly those owned by women and minorities. Women Construction Owners & Executives, USA We believe PLAs make it more difficult for minority-owned contractors to compete … they effectively work against the goals of increasing the number of projects awarded to minority-owned businesses by placing roadblocks in our way. Latin Builders Association, Inc. (PLAs) are bad for business, especially small businesses which constitute most of our membership. They impose undue restrictions on our ability to compete, increase the cost of doing business, reduce employee benefits, and interfere with the free negotiation process between employee and employer. They are patently unfair to small businesses who do not have the resources to comply with yet another government mandate. United States Pan-Asian-American Chamber of Commerce (PLAs) are not good business for small business in general, and particularly for women and minorities in business … the impact on women and minorities trying to compete in federal procurement would be devastating. National Association of Women Business Owners Minority and Womens Business Groups Oppose Discriminatory Union-only PLAs.

23 Q: If PLAs are not in the public interest, why do governments and corporations use PLAs? A: Politics, Power and Propaganda.

24 The Politics of PLAs.

25 Executive Order 13502: A White House Gift to Big Labor Repealed President Bushs PLA ban on federal and federally-assisted projects since 2001 ($147 billion worth of construction) Federal projects ONLY > $25 million. An encouragement, NOT a mandate. Does not cover federally assisted projects. Federal agency procurement officials will decide PLA use (with a little help from Big Labors friends). FAR Council Final Rule Issued 4/12.

26 Section 7 of Executive Order Section 7. The Director of the OMB, in consultation with the Secretary of Labor and with other officials as appropriate, shall provide the President within 180 days of this order, recommendations about whether broader use of PLAs, with respect to both construction projects undertaken under Federal contracts and construction projects receiving Federal financial assistance, would help to promote the economical, efficient, and timely completion of such projects. [Note: Order was issued Feb. 6, 180 days sets the deadline at Aug. 5 but an order hasn't been issued]

27 Q: If PLAs are not in the public interest, why do governments and corporations use PLAs? A: Politics, Power and Propaganda?

28 Common Arguments in Support of PLAs Wages and Benefits No Strike Promise Local Hire Union Productivity Union Safety Apprenticeship PLAs are Used in the Private Sector PLAs Reduce Costs PLAs Attract High Road Contractors and Increase Competition? Anyone Can Bid a PLA Project! Illegal Immigrants/Undocumented Workers

29 Get the Truth About PLAs on our blog

30 Federal Davis-Bacon Prevailing Wage Rates Union County, South Dakota Construction Type: Building Rates Fringes Boilermaker $ Carpenter$ Electrician$ % Ironworker$ Laborer$ Plasterer$ Plumber$ Sheetmetal Worker $ Power Equipment Operator$ Figures found through

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