Project Labor Agreements and how they effect Public Works Projects


One of the discussion points in the coming discussion regarding the proposed Right to Work legislation in the State of Indiana will revolve around the use of Project Labor Agreements (PLA’s) in public works projects. There are many studies out there with both pros and cons and the City County Observer will be posting many of those and even case studies for the purpose of educating our readers on this subject.

A PLA was signed and adhered to in the construction of the Ford Center and is believed to be in place for the recently announced $50 Million project between the City of Evansville and Johnson Controls. A PLA is also a requirement for the eventual builder of any downtown Convention Hotel.

The executive summary of the study on the link at the bottom of the story follows.


Based on an extensive analysis of the literature, legal opinions, and Congressional testimony on the use of Project Labor Agreements (PLA’s) on public construction projects, as well as interviews with proponents and opponents of their use, the Research Bureau makes the following observations:

• Project Labor Agreements, which are prehire collective bargaining agreements setting the terms of employment on an entire construction project, have been increasingly pursued by unions working on public projects since the U.S. Supreme Court upheld their legality under Federal law in the Boston Harbor case (1993).

• PLA’s are not needed to secure “fair” wages to workers on public projects, since such wages are already guaranteed under “prevailing wage” statutes in Massachusetts and other states.

• The chief benefit that PLA’s on public projects offer to the public is a guarantee of labor harmony, i.e., a pledge to avoid strikes and speedily resolve interunion disputes during the course of the project (Occasionally, however, such pledges have been violated.)

• The guarantee of labor peace is evidently purchased at the price of reducing the opportunity for nonunion contractors to compete for work on a project, since even if they should be awarded such work, the contractors are then compelled to operate under union rules governing such matters as staffing requirements that undermine the economies that might ordinarily give such contractors an advantage. Thus PLA’s tend to constrict the number of bidders on a project compared with those without PLA’s, and are likely to reduce the savings to the public that would accrue if nonunion contractors who are employed were allowed to follow their customary methods.

• Additionally, PLA’s tend to discriminate against nonunion workers, by requiring them if they are hired on a project either to join the union or else to contribute agency fees to the union as well as pay into its benefit funds, from which they are unlikely to derive benefits themselves.

• Because most smaller contractors are nonunion, PLA’s tend to have a detrimental effect in particular on the opportunities available to small businesses.

• Under Massachusetts State court decisions, PLA’s are allowable under state competitive bidding projects only for projects of large scope and complexity. It seems doubtful that the City Manager’s recent decision to order PLA’s for the North and Vocational High School construction projects will meet this test.

Link to Study:

WRRB MA Project Labor Agreements on Public Construction Projects The Case For and Against