LANSING – Gov. Rick Snyder took nearly two weeks to decide whether to sign legislation that bans local communities from implementing project labor agreements – but sign it he did.
Snyder put his signature under Senate Public Act 165 on July 19, after it was adopted strictly along party lines in both the Michigan House and Senate. Republicans voted in favor of banning PLAs; Democrats were against the measure.
“It’s unfortunate, it’s one less tool that local communities will have in their toolbox to be able to run their own affairs,” said Patrick Devlin, secretary-treasurer of the Michigan Building and Construction Trades Council. “This is a case of Lansing dictating what local governments can and cannot do, and if you ask a lot of these local officials about whether they would want to keep their PLA as an option when they go to let construction contracts, they’ll tell you they like PLAs.”
A spokeswoman for Snyder did not return our phone call, in which we would have inquired how this legislation is in the best interests of the state.
As we have pointed out in our last two editions, a court challenge by the state’s building trades unions to the validity of this law is highly likely, and there’s an excellent chance that it could be overturned.
Snyder could have let a 14-day period pass after the bill landed on his desk. Doing so would not have prevented the bill’s passage – any bill that stays unsigned on the governor’s desk automatically becomes law after 14 days – but it would have signaled his non-support. The building trades were also holding out (false) hope for a veto by the governor, but even then, state Republicans have a veto-proof majority in the Michigan Senate.
The new law prohibits local communities from entering into contract terms 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.”
Project labor agreements generally set terms of wages, hours and no-lockouts or strikes. They also can include language that spells out safety or skills training for workers, drug and alcohol testing requirements and vacation days. They are hardly one-size-fits-all contracts, and there’s no reason they can’t be written to allow the hiring of nonunion contractors, even though most require contractors to be signatory to a collective bargaining agreement.
But since nonunion contractors usually refuse to become signatory to a collective bargaining agreement, and can’t supply a workforce that has documented skills, and is safety-trained, and drug- and alcohol-tested, they are in fact usually excluded from PLAs.
Unions maintain that project labor agreements – which Toyota uses regularly on their construction projects in the U.S. – are simply business arrangements that give employers and municipalities a degree of confidence that they will have a workforce they can trust. PLAs also provide an effective baseline that levels the playing field for bidding contractors.
The anti-union Associated Builders and Contractors and the conservative Mackinac Center think-tank both promoted project labor agreements as a cost-saver for local governments. But several studies back up the union position that PLAs have zero impact on the cost of public construction. A July 2010 report by the Congressional Research Service – the non-partisan research arm of Congress – found: “Much of the research on the effect of PLAs on construction costs is inconclusive.”
Michigan Building and Construction Trades Council attorney John Canzano said there are several problems with the law. The first is that language in the law itself curiously 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.”
That takes us to the landmark 1993 Boston Harbor decision by the U.S. Supreme Court, in which the justices unanimously agreed that the ability of local governments to enter into project labor agreements is protected under the National Labor Relations Act.
That’s a potential whopper of a conflict that could derail this law when it comes time to appeal this case. But for now it’s the law of the land in Michigan, and municipalities are going to be loathe to enter into a PLA.
“This plan severely limits the flexibility and freedom that our local governments need to get the best value out of taxpayer dollars to stimulate economic development,” said State Rep. Thomas Stallworth III (D-Detroit). “While PLAs are not necessary for every project, this plan would essentially take that option away for all public projects.
“PLAs help save taxpayer dollars, ensure that construction projects are done right from beginning to end and protect our workers by improving scheduling, workplace safety and training. As lawmakers, we must protect taxpayer dollars from being wasted on substandard work that puts the safety of our communities and workers at risk. For those reasons, and more, I simply could not support this plan.”