Project Labor Agreements, also called Community Workforce Agreements or Project Stabilization Agreements, emerged in the 1930s as basic pre-hire agreements between the owner or contractor and the local building trades unions . These basic agreements set standard pay and benefit rates across the trades and prevented any work stoppages with no-strike, no-lockout, and speedy dispute-resolution provisions. Owners and contractors soon recognized the clear economic and managerial value of the PLA business model, and its use rapidly increased during WWII. By the 1980s, PLAs were common in both the public and private sectors, and had begun to evolve into the Project Labor Agreements in use today. Modern PLAs are negotiated on a case-by-case basis, and include sophisticated provisions that keep jobs running smoothly, promote efficiencies, and nurture the development of a skilled workforce.
Project Labor Agreements are agreed upon before a project is bid, so that all contractors and subcontractors will know exactly what to expect on the project and can cooperate to reach common goals. Successful bidders—whether union or non-union—will then hire workers for the project through the union referral system. The referral system ensures that all workers have top-notch training in safety and the crafts, which prevents costly mistakes and accidents .
Today, Project Labor Agreements in the public sector focus on creating a positive community impact as well as promoting on-time, on-budget completion. These PLAs are crafted to address the specific needs of the project and the community, including provisions for local hiring, minority and at-risk targeted training programs, minority-owned small businesses, apprenticeship ratios, scheduling, work rules, safety, cost-containment, management-rights and specialized procedures. It also enables community groups and schools to partner with local unions to connect people from low-income neighborhoods with training and a career in the building trades.