Associated Builders andContractors

Why is ABC Opposed to Union-Only PLAs?

Why is ABC Opposed to Union-Only PLAs?

PLAs discourage or prohibit merit shop contractors from competing for and winning construction project contracts. Construction contracts subject to mandated PLAs are almost always awarded exclusively to unionized contractors and their all-union workforces (hence the term union-only). Less competition and archaic and inefficient union rules increase the cost of construction projects subject to PLAs.

According to the most recent data from the U.S. Department of Labor’s Bureau of Labor Statistics, only 14 percent of the 2011 U.S. private construction workforce belonged to a union. This means PLAs discriminate against more than eight out of 10 construction workers who would otherwise work on construction projects if not for a PLA.

PLAs typically include the following provisions that discourage merit shop contractors from working on PLA projects:

Despite the fact contractors have their own benefit plans, PLAs require merit shop contractors to pay their workers’ health and retirement benefits to union trust funds. Thus, companies have to pay benefits twice: once to the union and once to the company plan. Nonunion employees never see any of the benefit contributions sent to union plans unless they decide to join a union and remain with the union until vested.

Paying into underfunded and mismanaged union pension plans can expose merit shop contractors to significant pension withdrawal liabilities and/or litigation. Signing a PLA and exposing a company to pension liabilities could bankrupt a contractor or prohibit a company from qualifying for construction bonds needed to build future projects.

PLAs require merit shop companies to obtain apprentices exclusively from union apprenticeship programs. Participants in federal and state-approved nonunion apprenticeship programs cannot work on a job covered by a PLA. This means craft professionals enrolled in all apprenticeship programs other than those offered by the union are excluded from local job opportunities.

PLAs require merit shop companies to obtain most or all of their workers from union hiring halls. This means a merit shop company has to exclude its hardworking employees from specific jobsites and use unfamiliar union workers instead. In rare instances, merit shop employers can use a limited number of their own employees; to do so, they must send their nonunion employees to the union hiring hall and hope the union sends the same employees back to that specific PLA jobsite.

Nonunion employees may have to pay union dues and fees or join a union in order to work on a PLA project.

PLAs drive up the cost of construction projects

By unnecessarily limiting bidders and following outdated and inefficient union work rules, PLAs consistently and unnecessarily drive up project costs. Analysis of numerous academic studies of public construction projects subject to prevailing wage laws indicates PLAs increase the cost of construction between 12 percent and 18 percent when compared to similar projects not subject to union-only PLAs.

PLAs discriminate against merit shop contractors and disadvantaged businesses and their employees

PLAs harm local workers

PLAs take away Employee rights

PLAs are not necessary to, and are not successful at, ensuring labor peace or keeping a project on time or on budget