The Building Tradesman Newspaper

Friday, July 20, 2012

Here we go again: State Republicans create new law to outlaw PLAs

By Marty Mulcahy, Editor

LANSING – For the second time in the last 12 months, the Republican-led state Legislature has banned state and local governments from entering into construction project labor agreements that involve the use of taxpayer dollars.

And for the second time in 12 months, the Michigan Building Trades Council hopes to be two-for-two in successfully appealing the law before a federal court.

On June 26, Gov. Snyder signed Senate Bill 1085, which prohibits contractors “from entering into or adhering to an agreement with one or more labor organizations in regard to that project or a related construction project,” according to a Senate Fiscal Agency analysis of the bill.

Michigan Building and Construction Trades Council President Zane Walker said he had hoped that Snyder wouldn’t sign the bill, keeping in mind “his commitment to running the state more like a business. Many successful companies, including GM, Toyota, Disney and even Wal-Mart, use this type of agreement on their construction projects because it provides lower costs and better value. State and local governments should continue to have the same option.”

Republican lawmakers have maintained that the bill would provide a savings to taxpayers because of greater competition. The Michigan Building and Construction Trades Council has pointed to numerous studies which indicate the PLAs are a business tool and don’t increase costs, and has maintained that the GOP simply wants to continue its quest to punish the state’s unions in favor of nonunion supporters like the Associated Builders and Contractors.

Indeed, the Senate Fiscal Agency’s analysis has been consistent with the building trades unions’ stand, with its latest statement saying there would be “indeterminate fiscal impact” caused by passage of the law.

Senate Bill 1085 is a legislative tweak on Public Act 98, which was adopted along party lines in Lansing last summer and signed by the governor. PA 98 similarly outlawed PLAs. The Michigan Building and Construction Trades Council appealed passage of the law before U.S. District Judge Victoria Roberts, claiming that federal labor law allowed the use of PLAs, trumping state law. In a ruling handed down in February, Judge Roberts agreed with the union position, and struck down the state law.

State Republicans so wanted to rid the state of the PLA law that they took the curious tactic of adopting the new law, even while Michigan Attorney General Bill Schuette has requested a stay on Judge Roberts’ ruling and is appealing it. At press time, there has been no stay issued on the original ruling, nor any rulings on the appeal.

Michigan Building Trades attorney John Canzano said the first Republican law ending PLAs could be viewed as “overly broad” in how it could exclude the use of PLAs. But the tweaked version of the law adopted last month, he said, still butts up against federal labor law. “Ultimately, I think a judge is going to rule the same way, that this law shouldn’t stand because it isn’t significantly changed from the first law.”

Canzano said no appeal would be filed in federal court on the second law until there’s a ruling on the state’s appeal of the first law.

Project labor agreements are generally sought by property owners (or municipal officials or school boards) and the construction contractors they hire. The PLAs affecting the construction labor force can vary from project to project, but 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 are hardly one-size-fits-all contracts, and 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.