Project Labor Agreements

Basics
Project labor agreements (PLAs) are a type of contract used in the construction industry to set the terms and conditions of employment on large projects of long duration and complex design. PLAs enable the swift resolution of disputes that can arise in the course of the project, thereby helping to ensure the timely delivery of the project while maintaining quality standards. More elaborate PLAs might include provisions that seek to improve conditions such as health and safety rules on the worksite, and to provide benefits to the community by including job and training opportunities for disadvantaged workers and guarantees of projects for small or minority-owned businesses.

Although PLAs have been around for years and used on some of the most famous construction projects in American history, they have become controversial as the non-union sector of the construction industry has grown and as PLAs have been applied to relatively small projects. While most PLA’s are negotiated for private sector projects, legislative attention has focused on limiting their use on public projects.

Current
While most PLA’s are negotiated for private sector projects, legislative attention has focused on limiting their use on public projects. A number of legislatures (AZ, IN, LA, MD, ME, MN, NJ, WV) are actively considering outright prohibition of PLA’s on public contracts, a measure that has already passed in Idaho. Some (AZ, MI, OH) have pushed for amendments to public contracting statutes with more narrowly prohibit collective bargaining terms or preferences for union labor. In Iowa, one of incoming-Governor Branstad’s first acts was an executive order prohibiting the use of PLA’s on public projects—a move that even rescinded agreements that were already in place.

FAQ
Why do we need PLAs?

PLAs serve an important and multi-faceted purpose. At their most basic, the simply ensure workplace and quality standards on large and complex projects. At their more expansive, they can use those projects to leverage broader community benefits such as job training or minority hiring.

Do PLAs increase costs on public projects?

Like “prevailing wage” laws, PLAs are often criticized for undermining competitive bidding and raising project costs. But recent research has punctured this misconception. PLA’s are often used to control costs, for example by limiting wage increases or bonus payments for the life of the project. In fact, much of the apparent increase in cost stems not from the PLA, but from those aspects of the projects in question (including scope, location, and complexity) that encouraged use of a PLA in the first place.

Learn More
Good overviews of project labor agreements are provided by the Economic Policy Institute, recent research sponsored by ELECTRI (The Foundation for Electrical Construction), and the AFL-CIO. The AFL “States of Denial” project has a nice summary of state-level attacks on project labor agreements.

Recent Research Highlights

Added March 15, 2011
Issue: Project Labor Agreements

Project Labor Agreements

Project Labor Agreements in Los Angeles: The Example of the Los Angeles Unified School District (Dec 2011)