Louisiana Bill Pre-Empts Union-Backed Project Labor Agreements

Looking to the 2012 elections, top operatives with organized labor say they are going to concentrate their efforts at the state level and will withhold their support for federal candidates. In the 2008 election cycle, unions spent almost $80 million on independent broadcast advertising, mail, and advocacy to either elect or defeat candidates for federal office, according to OpenSecrets.org. Federal records also show that labor union political action committees (PACs) contributed over $66 million to federal candidates in 2008, with 92 percent of this total going to Democrats.

But, this investment did not secure enough votes to pass the “card check” legislation and other policy measures weighted against the business community. So, a change in strategy is in order. Harold Schaitberger, president of the International Association of Firefighters, told FOX News, his organization is eyeing the political terrain at the local level. But there is no reason for states, especially Right to Work states, to play defense.

Instead, they should follow the example set by Danny Martiny, a Republican state senator in Louisiana, who has introduced a bill to safeguard competitive bidding practices in the construction industry. In a pre-emptive move aimed against contracts negotiated between employers and unions before workers are hired, Martiny has introduced Senate Bill 76. This legislation prevents state government officials from mandating Project Labor Agreements (PLAs) on publicly funded construction projects.

PLAs call for construction contractors, including those non-unionized, to require their employees to be represented by a union on government-funded construction projects. In practice, they lock out non-union construction shops from the bidding process, officials with the Associated Builders and Contractors (ABC), a private industry group, have argued.

Although the National Labor Relations Act of 1935 generally prohibits pre-hire agreements, an exception in the law was created for the construction industry.

All contractors, even if they are not unionized, must agree to have unions as the exclusive bargaining representative for the workers during the duration of any construction project operating under a PLA.

John Walters, director of governmental relations for the Louisiana Chapter of ABC, expects the legislation to spark controversy.

“There’s no question SB 76 is going to be one of the more divisive bills in the session,” said Walters who ardently supports the legislation. “We don’t have PLAs yet in Louisiana but they are popping up all over the nation and it is correct to view this as a pre-emptive move. There are several studies that show PLAs raise construction cost and hurt competition.”

Research from the Beacon Hill Institute shows that PLAs could raise construction costs by as much as 18 percent, while another study from Maurice Baskin, a law partner with Venable LLP in Washington D.C., concludes that PLAs reduce competition and delay construction. Baskin represents construction employees.

Martiny’s bill does not actually mention the phrase “Project Labor Agreement,” but it does preclude state government officials from requiring construction firms to enter into agreements with labor unions. SB 76 also prohibits government agencies from discriminating against construction shops that have declined union representation. But, even if the bill were to pass, Louisiana must still allow for federally mandated PLAs. SB 76 only applies to state agencies.

Since 97 percent of the construction industry in Louisiana is non-union, PLAs would put the overwhelming majority of construction workers at a great disadvantage at a time when the industry is still recovering from a recessionary climate, Walters said. The agreements also undermine Louisiana’s Right to Work laws, he argued.

“Workers typically are permitted to choose whether to join a union through a federally supervised private ballot election,” he explained. “PLAs require unions to be the exclusive bargaining representative for workers during the life of the project. The decision to elect union representation is made by the employer rather than the employees. PLAs are called pre-hire agreements because they can be negotiated before the contractor hires any workers or employees vote on union representation.”

Union-only PLAs strip away the right of construction workers to a federally supervised private ballot election when deciding whether to unionize their workplace thereby undermining Louisiana’s Right-to-Work law, Walters added.

Although PLAs have not yet taken root in Louisiana, a few failed attempts have been made at acquiring Responsible Contractor Ordinances (RCOs) and Responsible Employer Ordinances REOs, which contain language typical to PLAs, Walters noted.

As the Pelican Institute for Public Policy has previously reported, PLAs could also be used to coerce non-union employers, who already provide benefits for their workers, to also pay into union benefit plans.

An executive order from President Obama encourages federal agencies to use PLAs on construction projects costing over $25 million. This reverses an earlier executive order from President Bush that banned PLAs. In practice, this means that organized labor can position itself into areas of the country that are largely non-unionized and at the expense of taxpayers, Walters said.