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.