What is a PLA?
A project labor agreement (PLA) for a construction or infrastructure project is a collective bargaining agreement between contractors and labor organizations. In a PLA, the union and contractor agree to the terms and conditions of employment for all the construction workers hired to complete the project. Typically, non-union and union contractors are able to bid as long as they agree to the same terms and conditions. A PLA can promote stable wages, benefits, and working conditions, and provide a uniform set of rules for non-union and union workers .
Projects that often use PLAs have unique characteristics: 1) they are large scale and are expected to be completed in a short amount of time; 2) the project will require a large number of workers both union and non-union; 3) it is likely to call for a variety of skilled trades; and 4) it is particularly susceptible to strikes, lockouts, jurisdictional disputes, work stoppages or other disruptions.
By using a PLA, Employers can achieve their contract objectives of wage stability, a consistent skilled work force, and a uniform union/non-union labor force which each contribute to the overall efficiency and success of the project.
Essential Elements of a PLA Template
A project labor agreement (PLA) template is a pre-prepared legal document that can be used as the basis for an actual PLA. This type of template generally includes all necessary fields and sections to address the full spectrum of items that should be covered by a PLA. For example, it could include sections defining the scope of the construction project for which the PLA is in effect, and the types of employees to which the PLA will apply, such as specific classifications of skilled and unskilled workers, supervisory workers, and subcontractors. The template will likely also include provisions related to wage rates (at least those that are applicable to the project), working conditions and union jurisdictional rules.
Carefully drafted PLA templates contain language that has been tested and proven in practice over time. That said, the specific items included in a PLA template will vary depending on the region where the work will be performed, because PLAs are primarily jurisdictional instruments. For example, the terms of a PLA covering work in the Los Angeles area may be substantially different than those in the San Francisco area. Additionally, there may be PLAs that contain similar language to previously issued PLAs, but differ slightly in terms of applicability. For instance, while one PLA may apply to certain work performed on a new office building, another in the same area may apply to work performed on a highway or bridge project.
At a minimum, a PLA template should contain the following components:
Advantages of a PLA Template
A project labor agreement holds many benefits for construction projects when used correctly. Particularly when they are used for public works projects, PLAs can help drive down costs on a construction project while ensuring that it remains at or ahead of schedule.
When used on unionized projects, a PLA can increase the wages paid to workers, but decreasing worker turn over. When workers know they have a good employment relationship with an employer, they are far less likely to leave the job. This model gives for a number of potential advantages. With a better workforce, a contractor can work on multiple shifts to maximize paycheck hours. The contractor can also recruit better talent, since a poor employee history is less likely to impact the jobs available to a worker who has a PLA with another contractor. The contractor may also save money by having a unified labor force, such as an undocumented worker pool, due to relaxed labor laws in states such as Arizona.
Non-unionized projects tend to deliver lower wages, so using a PLA increases the amount of money that each worker earns. Though this can increase costs to the contractor, it is often balanced out by the efficiencies created by a predictable labor force. PLAs are often used on very large projects, which means that workers can spend months or years working on the same job. The increased income is more likely to be spent than saved, so it immediately stimulates the economy.
A PLA can also result in lower change-order expenses in the long run. Because workers are consistent, construction workers already know how to perform difficult tasks that are unique to the project at hand, which results in fewer revisits to the same location for rework. Since the contractors know that there is significant work to be done on the project, they are likely to be more precise in their bidding. This means that the contractors underbid, and the owner pays the significant savings to the workers.
Moreover, if used properly, a PLA can actually save time on a construction project. This is because a large construction project is always difficult to schedule. Having many different contractors performing many different tasks at once can often create difficulties as contractors at times run into each other. Because a PLA binds everyone, all contractors will be contractually obligated to work together to create an efficient schedule. This can significantly save the owner construction time and result in the building opening sooner.
How to Create a PLA Template
The drafting of a PLA template requires familiarity with the provisions traditionally included in PLAs, as well as knowledge of the labor laws applicable to government projects and the terms of applicable pre-existing collective bargaining agreements. Additional considerations include the incorporation of any specific requirements mandated by the relevant public entity and careful attention to state-mandated requirements, including any legislative, administrative or executive orders controlling the drafting of PLAs.
After outlining the monetary threshold for the use of the PLA, the template typically provides for adherence to CPPL provisions, including those relating to discipline and local employment. Other terms include identification of the project, the scope for application of the PLA, and enforcing sanctions for violation of PLA provisions. In the event that a contractor challenges a PLA requirement as a matter of competitive bidding, it is advisable for the PLA template to include a PLAs standing as permissible exercise of a public entities authority to ensure completion of a government project on time and on budget. It is also effective for a PLA template to include high performance requirements, such as deadlines and completion milestones, to facilitate quick project completion. A PLA template should provide for contractor obligations including participation in the PLA process through attendance at monthly and/or weekly meetings and submission of notice of worker shortages. Defined work hours, shift swaps, skills training, and fees for assistance from labor unions are also effective issues to address in a PLA template. It is crucial for a PLA template to address protections against badging practices and workplace discrimination, as well as provisions for conflict resolution, including for safety, redundancy and informal procedures. Finally, earnest money and no damages clauses should be included in a PLA template to avoid future litigation relating to breach of contract claims.
Common Obstacles and Solutions
Although a comprehensive project labor agreement template has several advantages, there can also be some obstacles to overcome along the way. While the benefits are evident, there are a few challenges that some projects may experience:
· Some union contractors may use PLAs as a way to eliminate union competition for a project. An owner may need to monitor the negotiations to ensure that this does not happen.
· The number of decisions needed during the negotiating process can be overwhelming. Some owners have needed to establish a committee for the purpose of communicating and making decisions with the contractor in order to get the best agreement. A good attorney can help with this process.
· If the project has an aggressive timeline , the owner needs to ensure that this timeline is possible in order for the terms to be adhered to.
· Negotiating can sometimes be emotionally charged. Owners would do well to allow for a back and forth negotiation process to take place to ensure that a productive outcome is reached.
By being aware of the challenges and working with a qualified attorney, an owner can ensure that a fair PLA is reached.
Case Studies: Successful Use of PLAs
While project labor agreements (PLAs) are not used on a majority of U.S. construction projects, they are used on a variety of large (and smaller) construction projects in the U.S. and around the world. These examples show how PLAs can be used to improve employment opportunities for minorities and women, increase construction efficiency and productivity, and promote economic development.
The Dulles Corridor Metrorail Project (DCMP) is a 23.1 mile extension of Metrorail into Loudoun and Fairfax Counties, Virginia. DCMP is being constructed in two phases: the Silver Line which runs from East Falls Church to Reston and Wiehle Avenue and the Silver Line Phase 2 which runs from Wiehle Avenue to the Route 772 station in Loudoun County.
The total cost of the 23.1-mile silver line extension is $3.1 billion with the Silver Line Phase 1 costing $2.2 billion. Construction of the 11.7-mile Silver Line Phase 1 started in 2009 and was completed in July 2014 at which time it became the first line to reach into Tysons Corner, Virginia. The Silver Line Phase 2 has already begun construction with completion expected in 2019. The entire $3.1 billion DCMP project is being built under the auspices of the Washington Metropolitan Area Transportation Authority (WMATA). As with all major projects built in the greater Washington D.C. area, DCMP is required to allow only those who have signed and ratified Sweeney-Miller Collective Bargaining Agreements (CBAs) of participating building trade unions to work on or bid on any DCMP work. Sweeney-Miller is the joint thrust of the six traditional building trade unions that have worked in the D.C. area since the advent of construction.
The San Francisco International Airport Bayfront development Project (SFO) is a 770,500 square foot office complex on 13 acres of land owned by the airport. With over 2,600 employees and over 150 tenants, SFO is the large office park in the San Francisco Bayarea. SFO included a 4-story multi-tenant building, two 10-story high rise buildings and an 8-story parking garage containing 990 parking spaces. Construction costs were $220 million and the project was completed in 2007.
The SFO project was built under the auspices of CBA’s of local AFL-CIO building trade unions. Through the use of PLAs, SFO successfully met its workforce participation goals of 50% of MBE workers on the project, which the Bonds Development Corporation (BDC) had calculated would result in a 5% savings due to reduced absenteeism and increased morale and productivity. BDC’s final tally showed that small and minority subcontractors accounted for 55% of SFO’s construction spending with 49% of the general contractors construction spending going to small and minority businesses.
Tips and Tricks for Negotiating a PLA
When it comes to negotiating, there are numerous things that Employers can do at the beginning of the process to increase the likelihood that they will enter into a PLA that satisfies all parties. The first option is to commit to the PLA process early on and use the document as a tool to facilitate the process at the front end. Setting the ground rules is an important step in establishing expectations throughout the project. This does not have to be done before a contractor ultimately bids and wins the job, but having an Agreement in hand will make it easier to retain the right Contractor and set the stage for the front end approach.
In addition to committing to the process early on and setting ground rules to promote collaboration, developing a core group of stakeholders can be very helpful in negotiating the terms of the Agreement. After agreeing to enter into a PLA and settling on dates to work on the details, in our experience the process goes more smoothly when there is an open dialogue among the involved parties to avoid surprises and minimize post-deal remorse. Having a core group of representatives from the Contractor, Developer, Building Trades and others involved in the negotiation can be very beneficial to staying ahead of the curve and avoiding a delay in reaching an agreement.
It typically helps to know exactly what you want as well as what you are willing to give up to get it. Every negotiation requires back and forth regarding terms and benefits, so knowing ahead of time what your parameters and limits are will help everyone from getting too far off track. Finally, having an open mind and a willingness to listen and compromise will go a long way toward a mutually beneficial resolution.
PLA Template Resources and Tools
Numerous resources are available for those either tasked with finding a PLA template or creating one. These resources provide guidance, template language, and examples specific to PLAs. The following is a list of some of the most reputable resources:
The Federal Highway Administration (FHA) provides the Federal PLA Template. The template was developed by the FHA as part of the U.S. Secretary of Transportation’s 2009 Executive Order on use of PLAs on federal and federally assisted projects over $25 million. The template includes appropriate terms and conditions consistent with the FAR and Department of Labor requirements. The FHA notes that additional items may need to be included based on the unique circumstances and needs of each project on a project-specific basis.
The Department of Transportation (DOT) also maintains a DOT PLA Template. The template includes sample language of terms and conditions that have been used on federal construction projects, including federal assisted construction projects over $10 million. For further information, see https://www.fhwa.dot.gov/policy/otps/pv/welcome.cfm
The National Labor Relations Board (NLRB) is one of several agencies that has noticed the increasing popularity of PLAs. In January 2010, the NLRB established a Project Labor Litigation Web Page, which provides access to all NLRB cases involving PLAs and to the full text of the NLRB’s recent decision in Shaw’s Supermarkets, Inc., 352 NLRB No. 63 (2015). See also, Temple University Hospital, NLRB Case No. 2-CA-118053 (December 8 , 2015).
The Association of Union Constructors (TAUC) website has a compilation of "local, national and international PLA resources." Information is provided about who to contact for various PLA agreements or documents. For example, there are links to PLA boilerplates for dozens of localities and states, as well as international and national union PLAs maintained by TAUC.
A more general search tool is the building and construction session of The Document Centre. The Document Centre covers a wide variety of regulations and "best practice" guidance for public sector procurement, and the building and construction section of the site contains additional information on the use of PLAs.
There also are a number of paid services and consulting firms that provide lists and other resources on PLAs. For example, Procurement Options for the Construction Industry (POCI) offers a wide range of services related to PLAs, including a PLA language library. See, http://www.procurementoptions.org.
A good overview of PLAs as well as links to online libraries and case studies is available at the American Construction Advocates. See, http://www.americancma.com/getthefacts.html.
Many individual jurisdictions also provide downloadable template language for PLAs. A couple of these resources are:
Many of these PLA templates and resources will prove helpful in both the negotiation and drafting process for a particular PLA. Using the language contained in these documents and websites will ensure that no important provisions are missed and that PLAs remain consistent with industry standards and legal requirements.