A Quick Primer on Project Labor Agreements

A Quick Primer on Project Labor Agreements

File photo by Sam Hodgson

In 2009, protesters gathered outside of San Diego Unified School District's headquarters to oppose a proposed project labor agreement. The pacts are controversial, often pitting labor unions against builders.

 

Now that proponents of a ballot measure to block labor-friendly construction agreements have gathered enough signatures to qualify their petition for the June 2012 election, it’s spurred another round of heated debate between powerful business and organized labor groups, conservatives and liberals.

Though it’s easy to get lost in the jargon-riddled rhetoric, the issue boils down to money. Both sides view billions of dollars in future public construction projects at stake, and they’ve unloaded campaign treasuries and courted politicians to support their causes.

To help you understand why the debate over project labor agreements has come to San Diego, how the two sides have etched out their positions and the latest developments, here’s a rundown of a few common questions.

What’s a project labor agreement anyhow?

In this debate, it refers to a contractual pact between government and organized labor groups for typically large construction projects. In exchange for workplace concessions like guaranteeing no strikes, government agrees to require that contractors hire workers through the union’s hiring hall.

Here’s a video explainer we did with NBC 7 San Diego:

Why are the agreements union-friendly?

The pacts guarantee unions a slice of the construction project. Though both union and nonunion workers can be hired through a union hiring hall, they typically must pay the union a fee for that service. That’s money in the pocket for unions.

Why do some government agencies use them?

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Proponents argue that dissolving the risk of delays and escalating project costs, especially for massive projects where delays can amount to steep bills, makes the deal worthwhile. The agreements can also give government greater control over who works on the projects, such as local workers, and how exactly they are compensated.

Has the city of San Diego ever used them?

It’s never signed a project labor agreement, but has considered them and has significantly funded contracts using them. In 2003, developers and labor groups signed a project labor agreement for Petco Park, which taxpayers shelled out about $300 million to build.

Why are we having this conversation now in San Diego?

In 2009, the San Diego Unified School District decided to use a project labor agreement for construction projects under a $2.1 billion bond. It marked a major victory for labor and business-backed groups vowed to prevent it from happening again.

Yeah, but do these agreements even happen very often?

Government agencies rarely use project labor agreements. But the San Diego Unified vote showed how a single decision could steer a significant amount of business toward unions for years to come. Similarly, the city of San Diego could hypothetically decide to use a project labor agreement for major public projects under discussion, such as a downtown Chargers stadium or Convention Center expansion.

Why do builders have a beef?

The Associated Builders and Contractors of San Diego, which has led the charge against project labor agreements locally, describes the pacts as unfair. It argues that bid requirements under the agreements favor union companies and deter nonunion companies from competing for contracts.

Labor groups, however, say the pacts make the bid process fairer. They say the agreements eliminate an advantage that nonunion companies might otherwise have in the process by requiring all contractors provide workers with the same wages and benefits.

Does the public end up paying more because of project labor agreements?

There’s no conclusive independent study or prevailing consensus among researchers. Locally, both sides have pointed to various studies, statistics and anecdotes to support their positions. Labor groups argue preventing costly strikes saves money while business groups say fewer bids leads to higher costs for taxpayers.

Organized labor says San Diego could lose money if the ballot measure is approved by voters? What’s the deal?

Last year, voters in Chula Vista, Oceanside and San Diego County approved similar ballot measures that banned their municipalities from requiring project labor agreements. Contractors in those places can still use them voluntarily.

This year, in response, state legislators drafted a bill that would prohibit project labor agreement bans and financially penalize charter cities that have them. The cities would be prohibited from receiving state funding for projects where the labor pact might have previously been an option.

Both the Senate and Assembly have approved the bill and it now awaits the governor’s signature or veto.

Keegan Kyle is a news reporter for voiceofsandiego.org. He writes about public safety and handles the Fact Check Blog. What should he write about next?

Please contact him directly at keegan.kyle@voiceofsandiego.org or 619.550.5668. You can also find him on Twitter (@keegankyle) and Facebook.

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6 comments
Omar Passons
Omar Passons subscribermember

@pmpiel: I had forgotten completely about prevailing wage requirements. Thanks for the detailed reply. @MM: Interesting link.

omarpassons
omarpassons

@pmpiel: I had forgotten completely about prevailing wage requirements. Thanks for the detailed reply. @MM: Interesting link.

ernie pearn
ernie pearn subscriber

Whats not explained clearly in this article is that PLA's are a backdoor deal the Unions make with the contracting party to ensure that the unions get paid no matter who does the work. This article does not say that a non union company is usually only allowed to provide 2 of their own employees before they need to use union employees from the hiring hall. Does it concern anyone else that there is a "No Strike" clause "IF" you ensure unions get the work? Isn't it unions who are the ones who strike? Isn't that called extortion? How about the fact that these projects are usually publically funded with all of our tax dollars. How is it fair that it is limiting competition to union employees? Don't non-union employees pay the same taxes? Yet they are being discriminated against based on union affiliation?

voiceofreason
voiceofreason

Whats not explained clearly in this article is that PLA's are a backdoor deal the Unions make with the contracting party to ensure that the unions get paid no matter who does the work. This article does not say that a non union company is usually only allowed to provide 2 of their own employees before they need to use union employees from the hiring hall. Does it concern anyone else that there is a "No Strike" clause "IF" you ensure unions get the work? Isn't it unions who are the ones who strike? Isn't that called extortion? How about the fact that these projects are usually publically funded with all of our tax dollars. How is it fair that it is limiting competition to union employees? Don't non-union employees pay the same taxes? Yet they are being discriminated against based on union affiliation?

Kevin Korenthal
Kevin Korenthal subscriber

This is a decent primer but it leaves out a very important piece of research on Project Labor Agreements in the last decade. The National University Institute for Policy Research worked with The Keston Institute for Public Finance and Infrastructure Policy at USC to produce a Study Measuring the Cost of Project Labor Agreements on School Construction in California. You can view the study, relevant media reporting the author's response to criticism of the study from a labor union think tank at UCLA by going to http://www.thecostofplas.com.

Merit Man
Merit Man

This is a decent primer but it leaves out a very important piece of research on Project Labor Agreements in the last decade. The National University Institute for Policy Research worked with The Keston Institute for Public Finance and Infrastructure Policy at USC to produce a Study Measuring the Cost of Project Labor Agreements on School Construction in California. You can view the study, relevant media reporting the author's response to criticism of the study from a labor union think tank at UCLA by going to http://www.thecostofplas.com.