Project Labor Agreements
Question: What is a Project Labor Agreement?
Frequently Asked Questions
A Project Labor Agreement (PLA) – sometimes referred to as a Community Workforce Agreement (CWA) – is a comprehensive pre-hire collective bargaining agreement that sets the basic terms and conditions of employment for an entire construction project.
Question: What is the difference between a PLA and a usual CBA?
In the construction industry, collective bargaining agreements are commonly negotiated between a single union that represents the members of a particular trade and a contractor or association of contractors that employ the members of that trade. As a result, on any construction site, there may be employees working under any number of collective bargaining agreements, or no agreement at all.
A PLA establishes the basic terms and conditions of employment for all of the employees who will be engaged on the project.
Question: Are there certain common features in PLAs?
A PLA will commonly have the following features:
Question: What happens to the local union agreements in the area?
- Uniform work hours and holiday schedules
- Prohibitions against strikes and lockouts
- Procedures for quickly resolving disputes that arise on the project
- Pre-job conferences to assign and coordinate work
- Joint safety and health committees
- Provisions for using apprentices on the project, to ensure job training opportunities while also lowering costs
- A commitment to utilize the services of the Center for Military Recruitment, Assessment and Veteran’s Employment and its “Helmets to Hardhats Program,” to recruit veterans to work on the covered project.
For purposes of the project to which the PLA applies, the PLA’s provisions will supersede the terms of any other collective bargaining agreements that would otherwise apply. However, the PLA will typically refer to the local collective bargaining agreements for other terms, including, for example, the wage rates and fringe benefits for each trade and the job referral procedures.
Question: Why would an owner or construction manager be interested in using a PLA?
PLAs provide owners and managers with a tool for creating a stable, uniform labor management foundation for methodically planning and scheduling a project. The agreements reduce the uncertainties inherent in large-scale construction projects by establishing all terms and expectations up front and creating a framework for cooperation among all groups working on the project. By adopting a labor-management model that fosters jobsite efficiencies and ensures an uninterrupted supply of qualified workers, PLAs keep a project on schedule, avoiding costly delays. They also allow parties to more accurately predict labor costs and production timetables, which means more accurate bidding and lower overall costs. PLAs also offer direct cost savings through streamlined safety procedures, avoiding the need to renegotiate agreements during the course of the project, setting work schedules to keep costs low, and using expedited dispute resolution procedures.
Finally, public entities are increasingly using PLAs to benefit the community in which the project is being constructed, by guaranteeing training and work opportunities to the local workforce.
Question: On what sort of projects are they most appropriate?
PLAs are most often used on complex projects that require the services of multiple contractors and subcontractors, employing numerous trades over a sustained period of time.
Question: When are they negotiated?
PLAs are negotiated during the planning stage for a construction project, before the bids are let and construction begins. That way, everyone interested in working on the project knows the groundrules up front, and can take the requirements of the agreement into account in preparing their bids.
Question: Can a public entity use a PLA?
Yes. When properly structured, it is lawful under both federal labor law and most state competitive bidding laws for public entities to use PLAs. Most states require agencies to assess their needs in undertaking a particular project and to make a determination that using a PLA will satisfy their needs on that project.
Question: Can PLAs be used on projects conducted by the federal government or that are receiving federal money?
Yes. During the administration of President George W. Bush, an Executive Order prohibited the federal government from requiring the use of a PLA on its own construction or construction for which it was providing any form of financial assistance. President Obama lifted those restrictions, and replaced them with a policy that encourages all federal agencies to consider requiring the use of PLAs when they undertake construction projects that will cost the federal government $25 million or more. The policy also permits the use of PLAs on lower cost federal construction and federally financed projects.
Question: Do PLAs on public projects have special features?
As with any PLA, any qualified contractor can bid to work under a PLA on a public project. Many agreements in the public sector, however, contain special accommodations to make it easier for contractors that do not ordinarily work under collective bargaining agreements to participate on the project. For example, some agreements will permit contractors to bring a certain number of their existing employees onto the worksite, without requiring them to go through the union’s hiring halls. Similarly, as noted above, the provisions of public sector PLAs are commonly only binding on contractors while they are working on that particular project.
In addition, as discussed in more detail below, public agencies are looking to PLAs as tools for providing training and career opportunities for community members.
Question: Do you have to be a union member to work under a PLA?
No. Anyone willing to work under the terms of the agreement is free to apply for work on the project. In fact, federal law prohibits employers from discriminating against employees based on whether they are union members. In non-“Right-to-Work” states, employees may be required to pay a service fee to the union that represents them on the construction project, but no one can be required to join the union.
Question: Do they discriminate against non-union contractors?
No. Any contractor that is willing to abide by the terms of the agreement is free to bid for work under a PLA. In the private sector, contractors who work on the project may be required to sign the underlying local union collective bargaining agreement. On public projects, however, contractors only have to agree to abide by the PLA and the underlying local agreements while working on that particular project.
Question: Is there any reason why minority or woman-owned businesses cannot work under a PLA?
No. It is entirely up to the contractor to choose whether to work under a PLA. In fact, as part of their commitment to using their construction projects to invest in community development, some public agencies have developed innovative programs to assist small businesses – including minority and women-owned contractors – in preparing bids and complying with the various legal requirements for operating on a construction site. As an example, the Los Angeles Community College District conducts one-day “boot camps” to help small contractors develop their capacity to handle work on the District’s construction projects. See http://www.build-laccd.org/bidding_and_contracting/index.asp.
Question: What happens to the pension benefits that are paid on behalf of non-union workers who work under a PLA?
It’s true that under a PLA a worker does not have to become a member of a union to obtain health and pension benefits. The Associated Builders and Contractors have made a lot of noise about pension benefits being paid to non-union workers under a PLA, and those workers will never see those benefits. But, you have to ask yourself this: what pension benefits do open-shop contractors pay their employees? Not surprisingly, only 21% of workers in the open-shop sector of the U.S. construction market were receiving retirement benefits (U.S. Census Bureau, 2006 Current Population Survey (CPS) Annual Social and Economic Supplement). And even for those workers, the vesting schedules are most likely similar to union pension plans (i.e. 5 years). So, for those non-union workers that do receive pension benefits by an open-shop contractor, they will have the same issue of not being able to receive those benefits once a particular job has been completed. Multi-employer pension plans in the union sector provide greater opportunity for continued employment because the individual worker can go to work for multiple employers and still be covered by various fringe benefit funds. Even if an open-shop contractor provides pension benefits, the employees lose out once that job is over.
Question: How have PLAs been used to achieve benefits for the community?
Public entities are using PLAs to provide opportunities for historically disadvantaged workers and businesses. Working together, agencies, unions, contractors and community groups have created innovative pre-apprenticeship programs to help community members develop the skills they need to enter apprenticeship programs; have reserved certain numbers of apprenticeship positions for minority or disadvantaged youth; have set hiring targets for members of the community; and have guaranteed certain numbers of jobs for small or minority-owned businesses. As a result of the requirements of the PLA applied to construction of the Washington National’s Stadium in Washington, D.C., for example, unprecedented numbers of D.C. residents were employed on the project as apprentices and journeypersons.
Public agencies in Los Angeles County have similarly used PLAs to significantly increase the number of local and disadvantaged workers successfully prepared for and brought into the local labor-management apprenticeship programs and hired on the projects. And in Chicago, the parties to the PLA covering school construction have recently set a goal of recruiting 25% of apprentices on covered construction from the public school system, a goal they are working to accomplish by developing an “education-to-career” program to provide students with an introduction to and experience in the trades. In short, these agreements are being used to bring historically disadvantaged community members into careers that will provide them with skills, good wages and solid benefits.
Question: Can you have a PLA in Right-to-Work State?
Yes. It is common for collective bargaining agreements to contain “union security” clauses that require employees, as a condition of employment, either to join the union or to pay a fee to the union that provides them with representation services. These clauses are not enforceable in a Right-to-Work state, which means that employees who choose not to join the union get all of the benefits of union representation without having to contribute to the cost. Agreements typically address this issue directly by stating that the union security provision does not apply in such a state. However, nothing precludes unions and contractors from otherwise entering into, abiding by and enforcing collective bargaining agreements, including PLAs, in Right-to-Work states.
Question: Critics say PLAs increase the cost of construction. Is this true?
No. Opponents of Project Labor Agreements have argued that PLAs increase project costs, but studies by UCLA, Cornell and other leading academics have concluded that there is simply no evidence to back up this conclusion, and that the studies on which the critics rely routinely fail to take into account other factors that influence a project’s costs. In fact, most PLA users speak to the economic benefits that come from having access to an uninterrupted supply of qualified workers, being able accurately to predict labor costs, utilizing expeditious mechanisms for resolving disputes, and creating labor-management cooperation committees to promote safe work practices on the job. As just one example, Toyota, which has built every one of its North American manufacturing facilities under a PLA, reports that its per foot construction costs are one-third less than those of its competitors who eschew these agreements.
Question: Does the use of a PLA reduce the number of bidders?
Not necessarily. While some traditionally non-union contractors may choose not to bid for work under a PLA, the experience of on many large-scale projects – including the Boston Harbor Project, the Port of Oakland, and the Southern Nevada Water Authority’s Improvement Project – show that non-union contractors bid and work on projects covered by PLAs. In fact, on the two-phase Nevada project, there were more bidders on the phase conduced under the PLA than on an earlier phase, conducted before the PLA was negotiated.
Question: What steps must a Council take to negotiate a PLA?
The Building and Construction Trades Department has developed a model PLA for its Councils’ use. The model contains certain provisions that, as a matter of BCTD policy, must be in any PLA to which the Councils agree. These provisions include a no-strike clause, a commitment to use the Plan for the Settlement of Jurisdictional Disputes, and a commitment to use the services of the “Helmets to Hardhats” program to recruit veterans. All PLAs must be submitted to the BCTD for approval before the Council concludes its negotiations.
The model agreement and other material to assist Councils in developing PLAs can be found on the BCTD website www.bctd.org/Field-Services.aspx