Thursday, June 18, 2009

Project Labor Agreements Explained

Almost every organization has a written business plan to make sure goals are achieved in a timely manner.

Project labor agreements (PLAs) are much like business plans for construction projects. A PLA is a contract between the project manager, the various craft unions, and the contractors on the project. They have proven to be an effective way to manage and maintain time schedules and budgets by standardizing and stabilizing wages and benefits, starting times, overtime rules, holidays, and other related matters.

PLAs differ from standard collective bargaining agreements in that they include all the parties working on a specific project, not just a single union and contractor. A PLA takes precedence over all pre-existing collective bargaining agreements between contractors and unions. The PLA binds the involved parties only to the terms of a specific project.

They insure that all the workers on the job work under the same work rules, including the same dispute procedure, with the exception of wages and fringes. Thus, the owner and/or project manager is only dealing with a single set of rules for every worker, there are no work stoppages (even if a given trade is on strike against their own management group!), and if there is a dispute everybody knows exactly how it will be handled.

Since the 1930s, public and private entities have successfully employed PLAs to increase harmony and productivity on jobsites. Widely recognized projects that utilized PLAs include: Hoover Dam, Grand Coulee Dam, Shasta Dam, St. Lawrence Seaway, Disney World, Cape Canaveral, the Trans-Alaska Pipeline, and the
Seattle Seahawks Stadium. Major businesses such as General Motors, Ford Motor Company, British Petroleum, Toyota, Humana, and United Parcel Service, have utilized PLAs for vital projects.

PLAs are used on both public and private construction. PLAs can provide a project with the stability and increased value needed to attract funding. Lenders look favorably on projects utilizing such agreements, since they greatly increase the likelihood that the project will be completed on-time and on-budget.

Efforts to outlaw the public use of PLAs only undermine a federal agency’s ability to exercise administrative discretion in choosing the best contracting methods and performance requirements for individual construction projects. Non-union workers are not excluded from work on public PLAs and in fact, such discrimination would be illegal. Non-union workers may register with the union hall for a PLA project, and are referred for work through the union.

They are not required to join the union to be referred for work, and do not need to pay union dues that fund collective bargaining representation. PLAs encourage fair competition among contractors by standardizing labor conditions. PLAs can streamline negotiations for complex projects, reducing costs along the way. Long-term, complex projects often involve several local collective bargaining agreements.

A consultant hired by the New York Thruway Authority determined the four-year refurbishment of the Tappan Zee Bridge in New York would require 19 separate agreements among the trades and their workforce and have cost more than $6 million extra if the project had been negotiated without a PLA.

Also, the local agreements would have required renegotiation throughout the life of the project, allowing opportunities for potential future dispute. Because of the convenience of one long-term agreement through a PLA, it is a time- and money-saver for the owner or construction manager.


Curious said...

Please clarify something. If a non union contractor wants to bid on a project that has a PLA in-place, he can do so but his workers MUST register with the appropriate union? Do I have that right?

bullhorner said...

Yes, any contractor union or non union can bid a PLA project. There are provisions in the PLA that allow a certain percentage of a non union employers employees to work on the project and not even join the union.
Most workers will be hired from the respective hiring system of the union covering the trade of that contractor.

bullhorner said...

Someone wrote in about their husband being an electrician and about state licensing.

State licensing is good but I can equate the task of trying to get state licensing passed through every county in the state at the same time as compared to how hard it is to just convince the "powers" to be in Ulster of the same . Even though I believe a woman lost her life in the last two days to an electrical fire. My quetion is who wired her home? Or who did the work that caused the fire? Can they tell? Was it inspected? At least with a licens in place this womans family would now if the person who did the work was responsible and if so, that person could be STOPPED from doing shoddy work again if that was the case. and possibly punished if warranted.

Her family has no real recourse now.

Build it Union said...

Lets face it, without the unions there are no other organizations that promote workers. All others try to screw them. At least PLA's include non union workers together with union workers.

MB said...

Non-union workers may register with the union hall for a PLA project, and are referred for work through the union.

They are not required to join the union to be referred for work, and do not need to pay union dues that fund collective bargaining representation.

I guess we don't want to spread this around do we...(?) :)

bullhorner said...

Is there a problem there that I dont see? The important point is that non union workers and non union contractors can work on PLA projects as can union workers and union contractors.

What a wonderful way to build.
Thanks for making that point.