This article is from Cal-Tax Digest, published
by the California Taxpayers' Association.
Cal-Tax Home Page | About Cal-Tax | Subscribe

Project Labor Agreements: Good or Bad?

Robert L. Balgenorth is president of the State Building and Construction Trades Council of California.

Eric Christen is executive director of the Coalition for Fair Employment in Construction (CFEC). The coalition's Web site is http://www.gmpla.org.

A disinformation campaign is being waged across California. It is hiding behind a false facade of concern for the well being of taxpayers - its real targets are the state's construction trade unions.

The focus of the campaign is a risk management tool used by communities in the construction of large public projects. It's called a Project Labor Agreement (PLA).

A PLA is an agreement that defines wages and work rules for a project, and is approved by labor and the awarding public body before the project begins. It eliminates the need to negotiate a separate labor agreement with each contractor and each building trade, and sets up a process of conflict resolution to deal with the occasional job dispute.

A large project involves many separate union and non-union contractors, each with its own schedule of starting times, holidays, and other ancillary work rules. A PLA coordinates these differences.

PLAs were first devised in the 1930s to coordinate huge projects like the Grand Coulee Dam. In those days, nearly all construction workers belonged to a labor union. PLAs are even more useful now, in an era when many non-union workers are on the job.

A PLA represents a meeting of the minds between labor and management. The centerpiece of a PLA is the "no-strike" clause. It virtually eliminates the threat of walkouts and other job actions. This protection against delay is imperative in a large public project, where just few days lost to a labor dispute can cost taxpayers millions of dollars. A PLA is the best tool yet devised to manage this risk.

Unfortunately, the malicious disinformation campaign is working hard to defeat these time-tested, money saving, common sense agreements.

It falsely describes PLAs as "union-only." The California Supreme Court, in throwing out a lawsuit against the San Francisco International Airport PLA, said, "The [PLA], by its terms, excludes no contractor, union or nonunion, from bidding on the airport project."

In fact, nonunion contractors are among the winning bidders on many projects covered by a PLA.

It falsely claims that PLAs cost taxpayers money by running up labor costs. But on public projects all workers, union and non-union, are paid at the "prevailing wage," and all contracts are awarded to the lowest bidder.

The campaign falsely claims that projects with PLAs end up suffering cost overruns, and it cites examples, such as the Eastside Reservoir Project east of Los Angeles and the National Ignition Facility in Livermore. But what they do not tell you is the overruns were caused by mistakes in the design or engineering of these projects, not by the PLA. With a PLA, there are no overruns on labor costs - they are predictable. That's the point of using one.

Who is fighting so hard to defeat the use of PLAs? Coalitions of contractors who loath labor unions, and don't want their employees to know what it's like to have a voice in their workplace, or to have the same rights and protections earned by union members - who don't want their unrepresented, non-union workers to be "contaminated" with workplace democracy.

The opposition to PLAs is not based on fairness or fact, but on a truculent anti-labor union attitude that puts selfish personal ideology ahead of the community's economic health.

After having their anti-PLA lawsuits thrown out of courts all over the country, the anti-union contractors have adopted a new strategy - talking to local officials one on one, behind closed doors, with no one else in the room to demonstrate the fallacies of their arguments, or to point out their deliberate distortions of fact.

When the same groups tried to use Proposition 226 to block union participation in elections, the voters of California sent them down to overwhelming defeat.

And when they offered their fallacious arguments to the California Supreme Court last year, they were thrown out on their ear.

When the anti-union contractor's disinformation campaign finally emerges from behind closed doors into the bright light of public meetings, voters and taxpayers will send the self-serving carpetbaggers packing once again.

Even in America 2000 there are those who still find it acceptable to openly discriminate against people simply based on the group those people choose freely to belong to. Never has this been made more evident than by the union bosses of the construction trade councils here in California, the chief proponents of Project Labor Agreements.

As I described in an earlier article (see March Cal-Tax Digest), and as opposed to the view of the article you have just read, PLAs, as they are most commonly called, are highly discriminatory, anti-taxpayer agreements that unions have placed on certain construction projects around the state. Their purpose is two-fold: gain back lost market share by implicitly keeping non-union contractors from wanting to work on these projects and, secondly, to boost their pension funds with the dollars put into them by the few non-union contractors who might actually sign onto a PLA. Regardless of whatever rhetoric is used to defend them, it is all about politics, power and an "us-against-them" mentality that borders on fanaticism.

I have been asked to respond to a piece put out by the State Building and Construction Trades Council. This is not difficult because deconstructing these "agreements" with logic, rationalism and common sense is what I do for a living. Their arguments are as easy to anticipate as a politician's desire to raise taxes (an end also achieved by PLAs because of their inherent waste).

For decades California has managed to build its infrastructure, buildings and homes with both union and merit-shop workers alike. Construction, after all, is a $100 billion industry in our state, an industry that until four short years ago managed to do very well without PLAs. The last few decades, however, have not been kind to the union side of the industry. As a whole they have seen their market share diminish from 90 percent to less than 20 percent. Some would say that the reason for this is simple: the market has found, in many cases, a more efficient way to operate. Others, however, claim that unscrupulous contractors have undermined union companies by paying inferior wages and building an inferior product, all so they could make more money for themselves and themselves only.

Those who view the latter as truth devised PLAs to see that "righteousness" was restored to the industry. If their wayward, non-union brothers didn't have enough sense to come back into the fold (most merit-shop contractors came out of the union) then PLAs would force them to see the light, one way or another. This blind allegiance to a fading way of life is the only way to explain the irrationalism PLA proponents subject themselves to in their defense of the indefensible.

This is not about getting projects done "on time" or "on budget" (none ever are). This is not about "no strike guarantees." After all, merit-shop contractors never strike, and besides there have been dozens of strikes on PLA projects. This is not about protecting the "working man" unless you subscribe to the adage that one must burn the village in order to save it.

This is not about what is best for taxpayers, for if it was, the last thing you would want to do is exclude 80 percent-plus of an industry from competing for a job to be paid for with the taxpayer's dollars.

No, this is about getting even, even with an industry PLA proponents view as illegitimate, period. When that type of irrational emotionalism keeps you warm at night, anything is legitimate, even a Project Labor Agreement.

On time and on budget? Not one, one, has been. No strikes? That sounds like a threat. Protects workers? How, by forcing them to pay into union pension plans that they will never become vested in and thus never benefit from? That's theft! No, thanks to groups like CFEC, these lies and this discrimination are finally being turned back. From Sacramento and Fresno to San Diego and the Bay Area the answer more and more is "NO!" to PLAs. The days of these agreements are limited because the market cannot be escaped for long, and in the end it is the owners, workers and taxpayers, not a few union bosses, who will benefit from this inescapable truth.

Editor's Note: See the March Cal-Tax Digest for previous articles on the PLA issue.