Project Labor Agreements (PLA) – Labor Agreement

Understanding Project Labor Agreements

Workers on construction site conferring.

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A project labor agreement or PLA is a pre-hire union labor agreement in which the contract terms and labor conditions are established in advance. Project labor agreements are sought by many to be a way to reduce costs controlling quality assurance and minimizing increased labor costs. Others look at Project labor agreements (PLA) as a way to seclude construction projects to union labor exclusively and discriminating against open trade and fair competition. Some project labor agreements (PLA) include no-strike and no-lockout agreements.

Project Labor Agreements Characteristics

Project labor agreements are used to secure savings, productivity, job stability, timely completion and quality work on large-scale projects. Using project labor agreements the owner secures better workforce conditions, obtaining higher productivity uninterrupted labor hours, dispute resolution procedures, safety conditions, and a continued access to workmanship. PLA bidding must be open and fair and cannot discriminate against nonunion contractors. Many federally-funded projects require Project Labor Agreements as mandated under the February 6, 2009 White House Executive Order.

Project Labor Agreements Clauses

These are some common agreement clauses that could be used on Project Labor Agreements (PLA):

  • No strike, no lockout, no slowdown or interruption of labors is allowed.
  • Union procedures shall govern hiring and a specific number of outside Employees working under the same craft must only be represented by their corresponding labor organization.
  • Schedules and contracts time provisions are standardized to obtain savings, improved efficiency and minimize disruptions.
  • Wage rates and fringe benefits are negotiated under collective agreements.
  • Labor escalation clauses are prohibited for the duration of the Project Labor Agreement.
  • Dispute resolution methods and alternatives are presented and approved such as Alternative Dispute Resolution, Arbitration Procedures or any other specific instruction.
  • Safety requirements and compliance are also covered under PLA's.

Project Labor Agreements Opposition Facts

Many construction organizations and companies do not favor the use of Project Labor Agreements for the following reasons:

  • Companies offering fringe benefits to employees must also pay another portion of fringe benefits directly to the union's trust fund programs.
  • Skilled workers enrolled under a non-union apprenticeship program are prohibited from working under PLA projects.
  • Non-union workers must enroll under the union's program to participate in the construction project.
  • Project Labor Agreements can increase construction costs by much as 20%.
  • Less than 20% of the actual workforce is enrolled in union organizations.
  • Work condition rules required in PLAs increase labor costs and that these are passed to the project’s developer.

Project Labor Agreements: Sample Projects

Some of the projects that have used Project Labor Agreements are:

· The Boston Central Artery Project (the "Big Dig")

· The Boston Convention Center

· NASA’s Cape Canaveral Launch Operations Center (now known as the Kennedy Space Center)

· The John C. Stennis Space Center, Mississippi

Project Labor Agreements Executive Order

Pursuant to Executive Order 13502, agencies are encouraged to consider requiring the use of project labor agreements in connection with large-scale construction projects. This executive order signed by President Barack Obama states that:

  • Project Labor Agreements shall be used on large-scale construction projects exceeding $25 million.
  • PLA' shall minimize construction delays due to lack of coordination among employers.
  • Project Labor Agreements will be evaluated on a project-by-project basis under equal employment opportunity standards among others.
  • PLA's shall contain ' guarantees against strikes, lockouts, and similar job disruptions.'
  • Requiring PLA's use is at the agency's sole discretion.

Project Labor Agreements Related Legislation

Two projects are now being presented to the Senate and the House of Representative to preserve open competition and Federal Government neutrality towards the labor relations of Federal Government contractors on Federal and federally funded construction projects. Those projects are H.R. 735 and S. 119 : 'Government Neutrality in Contracting Act.' Both of these projects are being favored by AGC and other construction professional organizations.