LANSING – Republicans in the Michigan Senate adopted a bill on June 16 that seems to outlaw the use of project labor agreements by local units of government in the state. Or, maybe not.
“I’m not sure this bill means what they want it to mean,” said Michigan Building and Construction Trades Council attorney John Canzano. “I’ve never seen anything like this.”
Senate Bill 165, the “Fair and Open Competition in Governmental Construction Act,” was adopted by the Michigan Senate. The bill says it will prohibit local units of government from entering into construction project labor agreements if those agreements contain references to collective bargaining agreements.
Language in the bill also prohibits local governments from awarding grants, tax abatements or tax credits for construction projects if the awardee (say, a city council or school board) inserts a prohibited term, such as PLA language, into a construction contract.
The bill also outlaws contract terms between local governments and contractors that “requires, prohibits, encourages, or discourages bidders, contractors, or subcontractors from entering into or adhering to agreements with a collective bargaining organization relating to the construction project or other related construction projects.”
The bill was adopted on a straight party line vote, with 26 Republicans voting for and 12 Democrats voting against.
But one of the kickers is at the bottom of the bill’s language, under Section 13. It says the proposed state law does not “Prohibit employers or other parties from entering into agreements or engaging in any other activity protected by the National Labor Relations Act,” or “Interfere with labor relations of parties that are protected under the National Labor Relations Act.”
In fact, that language completely contradicts an established legal precedent. In the U.S. Supreme Court’s landmark 1993 Boston Harbor case, the justices unanimously agreed that the ability of local governments to enter into project labor agreements is protected under the National Labor Relations Act (NLRA).
“The second part of the bill seems to give back PLAs, where the first part tries to take them away,” Canzano said. “What they’re trying to prohibit is already protected by the NLRA.”
It gets weirder.
In a statement published in the public record with the passage of the bill, the bill’s sponsor, State Sen. John Moolenaar, R-Midland, wrote:
“I want to address some of the concerns that were raised. During this process in committee, we added two amendments – one that affirms that this act does not affect the prevailing wage act, and second, that this act does not prohibit parties from entering into agreements or engaging in activity protected by the National Labor Relations Act.
“The National Labor Relations Act is what allows parties to enter into project labor agreements. So what we are doing today is not eliminating those agreements. Project labor agreements will still exist. They just won’t be able to discriminate anymore. So I would urge my colleagues to vote ‘yes.’ ”
Guy Snyder, who manages Michigan Construction News.com, wondered if the bill is “merely window dressing.” He pointed out that federal funding is almost always used on local and state-sponsored construction projects. And legally, some of the strings that may be attached to those local projects are the application of federal laws that allow the use of both PLAs and prevailing wage.
“Snyder wrote on June 21: “So if SB 165 should ever become law, we’re not sure how it will be applied, or for practical purposes, if it even can be applied.” When asked to respond to Snyder’s analysis, Canzano said, “it’s a good question.”
Snyder continued: “Is this another example of state politicians spending valuable time on legislation that may grab what they believe is good press while wasting our tax dollars? Are those who voted for SB 165 planning to use it to claim they’re ‘tough on unions’ and committed advocates for the ‘right to work?’ By drafting an ineffective if not useless law?”
The bill now goes to likely passage in the Republican-dominated Michigan House, where Canzano said he doubted the legislation would be changed, because there probably isn’t an effective fix for the flawed legislation.
The greater problem with passage of the law, he said, will be with local government leaders who could be unwilling to request project labor agreements because they will think it would violate state law.
The legality of this law, if adopted, will likely end up in the courts.