Report | Unions and Labor Standards

Building Better: A Look at Best Practices for the Design of Project Labor Agreements

Briefing Paper #274

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Project labor agreements (PLAs) are a type of contract used in the construction industry to set the terms and conditions of employment on large projects of long duration and design complexity. PLAs allow the expeditious resolution of disputes that can arise in the course of the project, thereby helping to ensure that the project is delivered on time and that quality standards are maintained. Recently, PLAs have begun to include provisions that seek to improve conditions on the worksite (e.g., health and safety rules) and provide benefits to the community by including jobs and training opportunities for disadvantaged workers and carve-outs for small or minority-owned businesses.

Although PLAs have been around for years and used on some of the most famous construction projects in American history, their use has become controversial as the nonunion sector of the construction industry has grown and as PLAs have been applied to relatively small projects. Critics argue that PLAs place nonunion contractors at a disadvantage in bidding on projects and raise overall project costs. PLA opponents are particularly critical of the use of PLAs on public projects. They argue that such usage violates the spirit of public bidding statutes by requiring the adherence to collectively bargained terms and conditions of employment as a prerequisite for winning a contract.

If designed properly, PLAs can help projects meet deadlines by guaranteeing a steady supply of highly skilled labor through the building and construction trades unions’ nationwide network of referral systems and by reconciling the various work routines of the many trades. PLAs also help to assure timely completion by keeping projects free from disruptions resulting from local labor disputes, grievances, or jurisdictional issues.

PLAs can improve efficiency and promote innovation by prohibiting restrictive work norms, by improving coordination in work flow, and by supporting experiments in changing the work environment. In addition, many PLAs include highly developed systems of labor/management cooperation.

A new report hopes to move the PLA discussion beyond a debate about whether PLAs are good or bad and toward a more constructive discussion regarding how to create PLAs that help deliver better projects for owners, contractors, workers, and communities.

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