For almost 70 years, Project Labor Agreements (PLAs) or, as they are sometimes referred to, Community Workforce Agreements (CWAs), have been a powerful tool in ensuring that 1) both large private and public projects are completed on schedule and within budget; 2) problems are addressed without disruptions; and 3) decent jobs are created for skilled building tradesworkers.
Given the current unemployment rates in the construction industry, being able to maximize the job-creating potential of PLAs/CWAs, while pursuing a high-road business model that benefits contractors and communities, is more important than ever.
What is a PLA?
Project Labor Agreements, also called Community Workforce Agreements or Project Stabilization Agreements (PSAs), are project-specific, pre-hire collective bargaining agreements that set the terms and conditions for employment including wages, benefits, work rules and dispute resolutions. They’re widely used in both public and private sectors for projects ranging from courthouses to reservoirs to sports stadiums to hospitals to nuclear power plants. Whether publicly or privately financed, PLAs/CWAs facilitate the smooth completion of what are typically large, long-term, complex projects by allowing stakeholders to agree to ground rules before the project starts. Given that larger projects usually involve multiple contractors and subcontractors, use of a single labor agreement covering all companies prevents inefficiencies and delays.
PLAs/CWAs are generally negotiated by a state or central building trades council on behalf of the area’s building trades affiliates. Before going into effect, such an agreement is submitted to the national Building and Construction Trades Department (BCTD) for final approval. This process helps protect the historical jurisdiction of each of the trades across the country.
Not only do PLAs/CWAs bring stability, reliability, quality, and enhanced long-term value to projects through the hiring of highly skilled trades workers, but these agreements are also often tailored to expand career and apprenticeship opportunities for local residents.
Despite a proven track record of reducing uncertainties and controlling costs on large projects, PLAs have been a constant target of nonunion construction and business interests, such as the Associated Builders & Contractors. These groups, and the candidates they support, complain that PLAs restrict the bidding process to only union contractors. This is not true. Any contractor willing to accept the agreement’s terms can sign a PLA/CWA – it is entirely the contractor’s decision. Anti-PLA forces also allege that PLA projects cost more, claims that have been refuted time and again by a significant body of impartial, academic cost-comparison research.
In 2009, President Obama reversed the ban on PLAs in federal construction that had been put into effect by George W. Bush. However, with the November 2010 election results and political shifts in a number of governorships and state legislatures, PLAs could be challenged at the state level through legislative or executive actions in as many as 16 states – including Alabama, Arizona, Arkansas, Arizona, Delaware, Georgia, Idaho, Indiana, Kentucky, Michigan, North Dakota, New Mexico, Nevada, Tennessee, Texas, West Virginia and Wyoming. A case in point: on January 14, 2011, new Governor Terry Branstad (R-Iowa) signed an executive order that effectively bans PLAs on state-funded projects of more than $25 million in Iowa.
In the face of emboldened efforts to ban state PLAs, the fact that public and private project owners continue to look to PLAs to contain costs during the steepest construction decline in decades is the most solid evidence substantiating BAC’s position that PLAs work for communities, owners, employers and workers.
Even Walmart is turning to PLAs more and more for the construction of its retail facilities. The latest example comes from New York, where the company has agreed in principle to a 5-year PLA with the New York City Building and Construction Trades Council.