The Building Tradesman Newspaper

Friday, June 28, 2013

Appeals court hears Michigan PLA case

By Marty Mulcahy, Editor

CINCINNATI – The U.S. Court of Appeals for the Sixth Circuit heard arguments June 18 on whether to toss out or uphold a ban on state and local governments participating in construction project labor agreements (PLAs) in Michigan.

Twice in the past two years the Michigan Legislature has adopted laws which essentially forbid state and local lawmakers and school districts from entering into PLAs on construction projects involving taxpayer money. And twice, the Michigan Building and Construction Trades Council sought to overturn the laws, taking the case before U.S. District Judge Victoria Roberts.

In both cases, Judge Roberts agreed with the building trades. In her most recent ruling last Nov. 15, she issued an injunction against the anti-PLA law, effectively making PLAs legal in Michigan.

A week after that ruling, Michigan Attorney General Bill Schuette announced his office would appeal the case. On June 18, the state’s attorney and Michigan Building and Construction Trades Council attorney John Canzano submitted briefs and were both given the standard 15 minutes to argue the case before the three-member appeals court panel.

“I’m cautiously optimistic, based on the way the judges were asking questions,” Canzano said. “Plus I think we have a strong case.”

The building trades took the case to the federal courts rather than the state courts, arguing that the state law is an across-the-board prohibition of project labor agreements, which is prohibited under federal labor law. After Judge Roberts struck down Public Act 98 of 2011, the first version of the anti-PLA law adopted by state Republican lawmakers, they attempted to tweak it. In June 2012 they passed a second, slightly different version – Public Act 238 – that they hoped would pass muster with the federal judge. It didn’t.

Judge Roberts’ original ruling striking down Michigan’s “Fair and Open Competition in Governmental Construction Act” (Public Act 98, 2011) said that the law “impermissibly interferes with the comprehensive regulatory scheme” established by the National Labor Relations Act. In other words, it violates federal labor law.

Canzano said Michigan’s case could end up before the U.S. Supreme Court and have national implications for the future of PLAs. He said there are similar court cases in other geographic districts, but Michigan’s case appears to be in the lead. A decision by the appeals court is expected “in a few months,” Canzano said.

PLAs have successfully been used for years on public and private construction projects. They generally establish wage rates, hours, and usually prohibit strikes or lockouts. The agreements can also include language that spells out required standards for safety or skills training for workers, as well as drug and alcohol testing requirements.

They generally allow the hiring of nonunion contractors, even though most require contractors to be signatory to, or adhere to, a collective bargaining agreement for the term of the project.

PLAs have effectively been used for years by school districts, cities, townships and counties as a business tool to manage major construction projects. State Republicans have justified their nosing into the affairs of local governments with the PLA ban by claiming they cost taxpayers money. That flies in the face of numerous academic studies which say PLAs don’t cost extra.

In addition, two separate independent state findings said eliminating PLAs wouldn’t save the taxpayers anything. “The Department of Technology, Management, and Budget states that there would be no fiscal implications for State of Michigan facility projects,” said a Michigan Senate Fiscal Agency’s bill analysis of PA 98.