Board Policy
Project Labor Agreements
March 12, 2003
Position: The Illinois Chamber of Commerce opposes the use of project labor agreements by federal, state or local government as an anti-competitive disruption of the open bidding process on public works projects, an unnecessary cost to taxpayers and government-authorized monopoly for specific units of organized labor to the detriment of non-union contractors.
Background: Project Labor Agreements (PLA) are contractual arrangements negotiated between units of government and organized labor that govern the bidding and completion of specific public works projects. PLAs are multi-employer, multi-union pre-hire agreements that set out the rules on wages, hours, and working conditions at construction sites and generally require all contractors and subcontractors to subscribe to a master collective bargaining agreement.. Typically, terms of PLAs are intended to effectively discourage the use of non-union labor in the completion of a project.
The Chamber’s position is in line with the policy of the Bush administration, which forbid expressly union-only PLAs on federal projects through Executive Order 13,202.
Why the Chamber Opposes the Use of Project Labor Agreements: PLAs are promoted on the basis they reduce costs and ensure “labor peace” on a project. In signing onto a PLA, labor holds out the prospect of guaranteeing that no work disruptions as the result of a labor dispute will occur during completion of the project. The Chamber believes PLAs neither reduce cost or are an acceptable accommodation to organized labor.
PLAs Cost Taxpayers More: By discouraging the use of non-union contractors, PLAs make the bidding process less competitive. Numerous high profile projects utilizing PLAs have experienced significant cost overruns including stadium projects in Ohio that led that legislature to prohibit state-sponsored PLAs.
PLAs are Anti-Competitive: PLAs discourage merit shop contractors to submit bids. A March 1995 study analyzed the effects of PLAs on bids for construction work and found that non-PLA projects had 21% more bidders and were 10% under budget.
PLAs Do Not Guarantee Timely Completion of Projects: PLA projects routinely come in late. In 1999, unions struck the PLA San Francisco Airport expansion project.
PLAs Are Unfair To Merit-Shop Workers: Merit shop employers are often forced to pay into union pension and welfare plans, yet their employees receive no benefit.
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