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by the California Taxpayers' Association.
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Over the course of the last four years, a new and very real threat has emerged that, left unchecked, will ultimately harm all Californians one way or another. The threat: Project labor agreements (PLA), and they are coming to a town near you.

What is a PLA and why are they such a danger? Put simply a PLA is a pre-hire agreement dreamed up by union bosses within the construction industry that, for all intents and purposes, makes the jobs involved union-only. Often done behind the scenes and without public scrutiny, these insidious agreements offer the unions who support them a playing field void of merit-shop competition. This makes it easier for unions to gain back some of the market share they have lost over the past 30 years.

However, more than 80 percent of the construction industry in this country is non-union (merit-shop) and, while PLA proponents might want to turn back the clock to "happier days," it is the California taxpayer who will be left footing the bill. How? Economics 101 teaches us that higher costs occur when you reduce competition in the marketplace. This simple concept has been lost on those pushing PLAs, and their primary concern appears to be punishing anyone who fails to support their collectivist mentality.

The Coalition for Fair Employment is a 200-member strong organization formed a year and half ago to fight PLAs statewide. Since that time, we have witnessed an almost exponential growth in these agreements (45 and increasing), with the unions having hit on a highly successful formula. One avenue they take is to go before a union-friendly public agency, such as the Los Angeles Unified School District (LAUSD), telling the school board that it has a deal that cannot be refused (should board members wish to remain in power, that is).

The PLA is masked in flowery rhetoric that would make it very difficult for many to refuse outright. They promise no strikes, work stoppages or labor strife. They promise that the job will be done on time and on budget and that most workers will be from the area. They also throw in the token promises of doing all they can to ensure a "diverse" workforce for good measure. Add to the mix the guarantee that with a union-workforce everything from job safety to work quality will be better and what you have is an agreement that sounds almost too good to be true. The problem is, it is. The promise of "labor harmony" is an implicit threat to the owner: "Do this or there will be trouble." As for a no-strike promise, well, that's not a problem with non-union companies.

Eric Christen is executive director of the Coalition for Fair Employment in Construction. He was the state field director for Prop. 226 (Paycheck Protection) in 1998, and has worked at both the congressional and state level for various elected officials. He can be reached at (707) 432-0676. The coalition's Web site is http://www.gmpla.org/.

 The promise of "on time and on budget" is so thoroughly discredited, from the Eastside Reservoir Project in Riverside County ($400 million over budget) to the San Francisco Airport Expansion (50 days behind schedule), that it is a wonder anyone with a sense of shame still makes the claim. The same is true of all the other "promises" as well. Of course this language has nothing backing it up. Yet when an entity like LAUSD signs off on it, you are more likely to see the income tax repealed than the PLA. In the case of entities like LAUSD, the unions have done their job and put their people in power, people obviously whose last concern is what is best for the taxpayers, not to mention the students. The result: All Proposition BB monies (the $2.4 billion Los Angeles school construction bond approved by voters in 1997) are now under a PLA.

Another approach used is the one just taken with Orange County supervisors who recently signed off on a six-year PLA for all county public works projects. How could this happen in "conservative" Orange County, where an informal Orange County Register poll found 95 percent of 1,400 respondents opposed to such an agreement? It's simple. The unions found an angle, in this case a majority of the supervisors who want a new airport, and made them an offer they couldn't refuse: "Give us a PLA and we'll help you get the airport." Be it a Democrat-dominated entity like LAUSD or a Republican-dominated O.C. Board of Supervisors, the offer of quid pro quo is the same, as are all too often the results.

PLAs discriminate against 80 percent of the construction workforce who choose to be union-free, not to mention women and minority contractors who are also predominantly non-union. What you have are agreements that are bad for all Californians.

This is why the Coalition for Fair Employment in Construction was formed, and, while the road ahead will be a long one, we are already beginning to achieve successes. In Fresno recently, the City Council became the first entity in California to outright ban PLAs on all city projects. This was accomplished due to the proactive approach, backed by a well-funded political action committee, taken by CFEC and many other organizations ranging from Associated Builders and Contractors to the local Chamber of Commerce. By getting in early, properly educating elected officials as to the downside of PLAs, and by forming a large and diverse coalition of PLA opponents, the cure to the cancer known as project labor agreements is there to be had.

These pre-hire agreements can be negotiated before employees vote on union representation or before the contractor hires any workers. They differ at the federal and state levels. National agreements are ready for immediate use on a construction project after approval by the sponsoring organization. At the local level, agreements are directly negotiated between contractors and local unions for specific projects.

They supercede all collective bargaining agreements and prohibit strikes and lockouts, establish uniform work rules covering overtime, hours, and dispute resolution, and prescribe craft wages.

PLAs were used during and after World War II in defense and atomic energy construction projects. The private sector used PLAs on the Trans-Alaska pipeline and Disney World.

They also are a political football. In 1992, President George Bush issued an executive order banning the use of PLAs for federal or federally funded construction projects. However, President Bill Clinton revoked that order in 1993. In 1997, he issued a memorandum encouraging use of PLAs on contracts over $5 million for construction of federally owned facilities.

Court battles have been waged. The U.S. Supreme Court upheld the use of the Boston Harbor cleanup PLA in 1993.

Last August, the California Supreme Court, rejecting a lawsuit filed by contractors, ruled that government agencies can require municipal projects to be built under union contracts. At issue was the $2.4 billion expansion of San Francisco International Airport, which in 1996, according to PLA critics, became the first modern type of PLA seen in California. This type of PLA had characteristics not seen in earlier PLAs, such as union-hall hiring requirements and workers forced to pay union dues, including payments into pension funds. Also, earlier PLAs existed in a marketplace that was dominated by unions. Less than 20 percent of the industry is unionized today.

In the wake of the San Francisco airport case, PLAs have been cropping up throughout the state, from liberal San Francisco to conservative Orange County.

Stymied in the courts on their argument that PLAs violate competitive bidding laws, contractors who employ non-union workers have organized to lobby locally elected officials. To offset labor union political contributions, the contractors are forming political action committees to support or oppose candidates for local offices.

Proponents generally say PLAs are worthwhile because they avoid work stoppages that could occur on long-term projects as local collective bargaining agreements of different crafts may expire at different times, and they provide access to a skilled labor force. (The Building and Construction Trades Council of California was solicited to provide its views on PLAs, but had not done so by the time this publication went to press.)

Opposition views are expressed in these guest commentaries.

On June 1, 1999, Parsons Constructors, Inc., entered into a project labor agreement (PLA) with the Building and Construction Trades Department of the AFL-CIO, and its affiliated labor unions.

This agreement was made with respect to new construction work on the San Diego County Water Authority's (SDCWA) $700 million Emergency Storage Project, on which Parsons serves as project contractor. The Water Authority Board of Directors then passed a resolution directing that the PLA be implemented by SDCWA staff.

In a recently released study by Rea & Parker, Inc. commissioned by the San Diego County Taxpayers Association (SDCTA), the association found four key conclusions:

• Implementing the PLA results in higher administrative costs of at least $2.8 million.
• The PLA results in a reduced number of bidders, leading to higher construction costs, with the possibility of reduced ethnic and gender minority participation.
• Many workers may not receive health and other benefits, potentially requiring taxpayers to pick up the additional social costs.
• The PLA may reduce the likelihood of work stoppages, a benefit on this and other public works projects.

The Water Authority's Emergency Storage Project involves the expansion of an existing dam, construction of a new dam, and construction of pipelines and pump stations.

The Water Authority has indicated that the timely completion of this project is central to its ability to meet emergency water storage needs in San Diego. Also, the authority says it is essential that the construction work be done in an efficient, economical manner in order to secure optimum productivity and to avoid any delays. It is through the PLA that the authority claims to be able to achieve these objectives.

What is a PLA?

A project labor agreement is a type of collective bargaining agreement sometimes used on large construction projects. It forms the central core of labor relations on large projects by standardizing terms and conditions of employment among multiple contractors, providing a single dispute resolution mechanism, and providing the project with increased level of protection from strikes, picketing, and related activities by union workers.

Obviously, open shop (non-union) employees do not and, technically, cannot strike. On projects where a PLA is used, it is typically mandatory for all contractors to agree to be bound by its terms, so that both union and non-union employers must accept the PLA as a condition of being awarded work. Ostensibly, the purpose of the PLA is to promote efficient and harmonious construction and to increase the likelihood of timely completion.

But as shown by the SDCTA study, the Water Authority's PLA for the Emergency Storage Project will directly and unnecessarily cost the authority at least $2.8 million in administrative costs, likely drive up construction costs as a result of fewer bids, lessen minority participation and may result in workers paying for benefits they won't receive.

Public agencies that mandate PLAs for public works projects, in the hope of increasing efficiency and reducing costs, should think again. In reality, PLAs will likely increase costs. The public policy goals of PLAs can be achieved at less cost to the taxpayers by encouraging voluntary agreements between contractors and organized labor.

Scott Barnett is executive director of the San Diego County Taxpayers Association, founded in 1945. The executive summary of the association's PLA study can be found on its Web site, www.sdcta.org. Complete studies are available by calling SDCTA at 619-234-6423.