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Blog Post

The Truth About Project Labor Agreement Misconceptions

05/23/2017

As we anxiously await the Trump administration’s proposed $1 trillion infrastructure plan with hope that the nation’s crumbling infrastructure will receive a much-needed overhaul, lawmakers should work to protect indispensable tools like Project Labor Agreements (PLAs) to deliver on President Trump’s election night pledge.

PLA opponents spread misinformation about PLAs. The truth is that PLAs are good business and that’s why they continuously receive bi-partisan support and are used both in public and private projects. PLAs, aka Community Workforce Agreements, are pre-hire collective bargaining agreements that standardize contract terms across various craft agreements, prevent delays, and provide access to a steady supply of safe and highly skilled labor by investing in the next generation construction worker.

Cornell University conducted the most comprehensive study of PLAs in 2011 examining 185 PLA jobs nationwide as a follow-up to its 2009 study. It concluded that PLAs benefit everyone involved – construction industry, owners, contractors, workers, local communities and tax payers. The Cornell report stated that the reason for the industry’s increased reliance on PLAs is clear: they provide value for government and corporate purchasers of construction services – producing the best work for the money with on-time, on-budget performance. 

In 2010, the Economic Policy Institute (EPI) studied PLAs as part of a briefing paper on best practices in PLAs. The EPI report stated, “PLAs can help projects meet deadlines by guaranteeing a steady supply of highly skilled labor and by reconciling various work routines of various trades. PLAs help to assure timely completion, keeping projects free from disruptions. They can be written to advance important policy goals.” Because PLAs are negotiated pre-bid and tailored to the needs of projects, they give project owners, contractors and workers a unique opportunity to avoid potential problems that might impede progress.

These studies have tested and discredited claims of opponents that PLAs increase construction costs.

PLAs increase the stability and efficiency of complex and long-term construction projects. Large projects usually have multiple employers and present special challenges. PLAs increase efficiency and improve safety and communication on large construction projects, which is priceless from the customer’s point of view. Large and complex projects across the nation such as Hoover Dam, Kitsap Naval Base, LAX Airport, and the Tappan Zee Bridge replacement have been built using the PLA model. Disney World uses PLAs in its core construction and maintenance operations to ensure a steady flow of qualified workers in a largely non-union environment like Florida, which proves that many private companies find PLAs cost effective and useful to keeps them competitive.

One of the biggest challenges of the construction industry today is a lack of a skilled work force. PLAs include provisions for workforce development and apprenticeship programs that train workers for careers in construction using formal standardized curriculums. It is one of the most significant benefits of PLAs. A highly skilled workforce not only helps finish projects on time and on budget, but also helps create a culture of safety on the job site. PLAs include language establishing committees to manage safety and health issues. The National Maintenance Agreements, which is a series of collective project agreements utilized by more than 2,000 industrial contractors, has taken safety to the next level as evidenced by millions of safe, incident-free hours worked in the private sector across the nation. Ford, General Motors, Chrysler, American Electric Power and Chevron, to name a few, have been the proud recipients of the National Maintenance Agreements Policy Committee’s Zero Injury Safety Award.

One of the most persistent myths used in propaganda against PLAs is that they are “government mandated” and “discriminate against non-union”.

It's not true.

In fact, PLAs originated in the private sector and are overwhelmingly used in private construction projects to prevent costly delays. Major corporations such as Walmart, General Motors, Delta Airlines, Toyota, Exelon Corporation, Southern Company, Pfizer, Merck, Johnson & Johnson and Astellas use PLAs to ensure the timely delivery of high-quality construction projects.  As a matter of fact, President Trump’s private construction projects including Trump National Club House, Trump Plaza, and the Trump Taj Mahal have benefitted from PLAs.

PLAs are open to all contractors for bidding. PLA bidding must be open and fair without any discrimination against any contractors. There is no federal mandate that requires the use of PLAs. There are efforts to ban the use of PLAs at the federal level. But why shouldn’t the tax payers have access to the same cost-saving tools for public projects as the private sector to ensure efficient delivery of projects?

The claim that PLAs require contractors to hire union members and force non-union workers to pay union dues is another myth used in propaganda against PLAs. PLAs don’t require exclusive use of union labor. In fact, it’s against the law.

In its landmark 1993 Boston Harbor decision, the U.S. Supreme Court recognized the value of PLAs in serving the public interest and opened the door for state, county and municipal agencies to use them. In its 1996 Thruway Authority decision, the New York Court of Appeals established guidelines for the use of PLAs on publicly funded construction in the state. In 1997, Governor Pataki issued an Executive Order reaffirming benefits of PLAs and encouraging PLA use in New York State.

PLAs ensure that the taxpayers get the most for their dollars and protect residents from the burden of an unsafe jobs where the injured lack quality health care. A 2011 study showed that the local economic impact of employing local workers is eight times higher than non-local work. PLAs include provisions to ensure local workers get jobs on projects and tax payer-funded worker wages are spent locally. PLA’s are a social investment used to support communities and build middle-class careers. It is a win-win situation for all. American tax payers deserve wise infrastructure investment using tools like PLAs to ensure efficiency and safety.

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