Project Labor Agreements Hurt Black Contractors & Workers

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A Project labor agreements (PLAs) also known as a Community Workforce Agreement, is a pre-hire collective bargaining agreement with labor organizations that establishes the terms and conditions of specific construction project.

These types of agreements are often a point of contention in the construction industry, particularly between private & union contractors, and are often credited for hurting black contractors ability to bid on public projects. These agreements are so contentious that builders are trying to get government-mandated PLAs banned at both the state and federal level.

In short, before any workers are hired on the project, construction unions have bargaining rights to determine the wage rates and benefits of all employees working on the particular project and often force non-union contractors to agree to the provisions of the agreement through political influence.

When signed, the terms of the agreement apply to all contractors and subcontractors who successfully bid on the project, and subsequently supersedes any existing collective bargaining agreements.

In other words, the deals govern just about anything related to how both union and nonunion workers are hired and treated on the job.

The agreements have been in use in the United States since the 1930s, and first became the subject of debate in the 1980s, for their use on publicly funded projects. In these instances, government entities made signing PLAs a condition of working on taxpayer funded projects.

Contractors are most likely to encounter PLAs on publicly funded projects. But in union strongholds like New York City and Los Angeles, it is very common to find a PLA in place on major private construction projects, such as the Los Angeles Stadium/Entertainment District at Hollywood Park that is a private. A PLA was also entered into for the second phase of the $25 billion Hudson Yards project in Manhattan, after several lawsuits were filed in New York.

Opponents of PLAs state that the agreements impact competition for project bids, which can lead to higher costs, particularly labor cost. Also, PLA’s reduce the number of potential bidders as non-union contractors, especially black contractors, are less likely to bid due to the potential restrictions a PLA would pose.

But according to union supporters, PLAs can be used by public project owners like school boards or city councils to set goals for creating local jobs and achieving social welfare goals through the construction projects.

PLAs may include provisions for targeted hiring and union apprenticeship ratio provisions. According to proponents, by including requirements for a certain proportion of local workers to enter union apprenticeship programs working on the construction program, PLAs can be used to help local workers gain skills.

Those who oppose PLAs have pointed to examples such as the construction of the Yankee Stadium and the Washington Nationals Ballpark, for both of which community focused hiring agreements were in place but the goals of local hiring and resources to be provided to the community were not met.

How PLA’s effect to Black Contractors & Black Workers

The National Black Chamber of Commerce opposes the use of PLAs due to the low numbers of black union members in the construction industry. According to the NBCC, implementing PLAs leads to discrimination against black workers who are generally non-union.

NBCC Policy Statement on Project Labor Agreements:

“It is the policy of the National Black Chamber of Commerce, Inc. to oppose Project Labor Agreements. This opposition is based on the fact that African American workers are significantly underrepresented in all crafts of construction union shops. This problem has been persistent during the past decades and there appears to be no type of improvement coming within the next ten years.

There have been rouses of diversity pre-apprenticeship training programs during the past twenty years but no increase in diversity at the apprenticeship to journeymen levels. The higher incidence of union labor in the construction industry, the lower African American employment will be realized. This is constant throughout the nation.

Also, and equally important, the higher use of union shops brings a correlated decrease in the amount of Black owned businesses being involved on a worksite.”

The problem with a project labor agreement, according to critics, is that contractors hire workers through hiring halls run by the building trades unions for their members, which are predominately white and have always been segregated.

As a result, African-American construction workers – no matter how experienced – tend not to be union members and have little access to union jobs. Black workers tend to work for non-union, Black-owned small construction firms. Those jobs could be eliminated by the use of PLA's.

It is also clear that the construction trade labor unions have been, and remain, a serious obstacle to the participation of black owned contractors in the construction industry. They intimidate black-owned construction firms to discourage utilization of black construction workers, discourage workforce development in higher-paying skilled trades, send less qualified workers to black-owned construction firms, and discriminate against black workers in apprenticeship programs. The execution of project labor agreement has also been cited as disadvantageous to black-owned construction companies and their desire to employ black workers.

According to Harry Alford, President of the National Black Chamber of Commerce:

Project labor agreements handicap nonunion contractors who wish to bid on federal projects by imposing burdensome requirements on them. Under a PLA, an open shop contractor could be required to employ workers from union hiring halls, acquire apprentices from union apprentice programs, and require employees to pay union dues. As an example, he cited Nationals Park, which, was built under a PLA. Although it is in Southeast DC, “very few people in southeast Washington ”worked on it. As Alford noted, most minority contractors are nonunion.

Mr. Alford is completely right.  An October 2007 report by the District Economic Empowerment Coalition found that despite a government-mandated PLA requiring that at least 50 percent of journeyman hours on the Nationals Park project  be performed by DC residents (many of whom are black), non-DC residents worked over 70 percent of the journeyman hours!  The report also found that not only did contractors subject to the Nationals Park PLA failed to meet the hiring requirements, but they also failed to provide the training and apprenticeship opportunities they promised the District.

What do the studies say?

Several studies by the Beacon Hill Institute (BHI) at Suffolk University in Boston, Massachusetts have concluded that PLAs increase construction costs. Studies examining the impact of PLAs on school construction in several states have found that where PLAs were in use construction costs were increased. In 2003, a study by the institute found that use of PLAs created a cost increase of almost 14% increase compared to a non-PLA project. The following year their study of PLAs in Connecticut found that PLAs increased costs by nearly 18%. A May 2006 study by BHI found that the use of PLAs on school construction projects in New York between 1996 and 2004 increased construction costs by 20%.

In 2010, the New Jersey Department of Labor studied the impact of government-mandated PLAs on the cost of school construction in New Jersey during 2008, and also found that school construction projects where a PLA was used had higher costs, per square foot and per student, than those without a PLA.

Yet, construction trade unions support PLA’s, and state that rather than increase cost, the agreements provide benefits to the community, with higher paying jobs, and apprenticeship opportunities. According to unions, project cost is directly related to the complexity of a project, not the existence of an agreement.

Are union workers paid much more than nonunion workers? Not really. Including benefits and excluding union dues, most nonunion contractors (commonly called “merit contractors”) pay about the same as non-union contractors because they want to keep their good employees; the same method used by union contractors.

Some are arguing that there’s more at stake than just the cost of a project, and that PLA’s are outright unjust. Nationally, fewer than one in seven construction workers are in a union. What this means is that imposing a project labor agreement may deny work to six of seven local construction workers.

BOTTOM LINE

In 2009, President Barack Obama signed executive order 13502, which urges federal agencies to consider mandating the use of PLAs on federal construction projects costing $25 million or more on a case-by-case basis.

PLA’s disproportionately hurt black works and black contractors.

The debate has been heating up, as House Republican lawmakers have been recently urging President Trump to rescind Executive Order 13502. In a letter signed by 44 republicans to President Trump, they urged the following:

“We have strong concerns with Executive Order 13502 and believe that rescinding this negative policy is in line with your plans to cut red tape in Washington and across our government agencies.

To create the conditions for innovation and free enterprise, we must promote open competition, efficiency, fairness and equality in government contracting. Mandating, or even encouraging PLAs needlessly limits the pool of experienced and qualified bidders able to deliver the best possible product to taxpayers at the best possible price… Ensuring that PLAs are not encouraged on our federal projects will send a clear message to the construction industry that this administration is committed to merit-based, cost-effective projects that provide the best benefit for hardworking taxpayers.”

Construction industry-friendly President Donald Trump has not indicated he will make a move on this issue.