Disagreements over PLAs in US could lead to legal challenges

For the first time in US history, Project Labor Agreements (PLA) will be required on federal construction projects valued more than or at US$35 million, but some industry leaders are not happy and are promising legal action.

On December 18, US President Joe Biden released his final rule on Executive Order 14063 (Federal Acquisition Regulation: Use of Project Labor Agreements for Federal Construction Projects), which makes mandatory the use of PLAs for federal projects costing more than US$35 million.

Shortly after the president’s announcement, Associated Builders and Contractors (ABC) released its own statement promising the decision “will face legal challenges.”

What is a PLA?

Project Labor Agreements, also known as Community Workforce Agreements, are US federal government pre-hire collective bargaining agreements that establish terms and conditions for a specific federal construction project. Projects mandated by a PLA typically necessitate the use of unionised firms, contractors, and workers, which has concerned non-union companies.

The PLAs control, among other details specific to each case, the wages paid to workers, benefits, and timelines for the project.

Ben Brubeck, ABC vice president of regulatory, labor and state affairs, suggested that forced PLAs creates a monopoly for union firms on federal projects, which, in his opinion, benefits the minority of contractors in the US.

He said the mandatory PLAs were exclusionary and a disservice to “the 88.3% of America’s construction industry who have made the choice not to belong to a union and want a fair opportunity to participate in federal construction projects.”

Brubeck called forcing PLAs “burdensome, inflationary and anti-competitive” and suggested such federal projects will be more costly to taxpayers.

President Biden’s statement struck the opposite tone.

“This means that projects funded by my Investing in America agenda will move faster and without delays, giving taxpayers better bang for their buck,” stated the release.

The US President also noted that he believed more union work on federal projects will lead to safer working conditions and better benefits for workers.

The Pros and Cons

The perception of PLAs depends largely on political alignments, as the country’s Democratic Party favours mandated PLAs and Republicans are opposed.

Proponents of PLAs cite increased safety, better control over project costs and deadlines as positives. Those in opposition say the PLAs drive up costs for federally-funded projects, unfairly favour unions and reduces competition.

PLA usage by the US federal government dates to the 1930s.

In the US 1930s, historians estimate that nearly 90% of construction companies and/or workers belonged to a union. Today, those numbers are flipped, with ABC providing figures showing nearly 90% of workers and companies are non-union.