Union and Merit Shops: Shaping America's Future

The Facts -

  • Federal funds require PLAs, favoring union labor in construction projects.
  • PLAs don't mandate union membership but limit bids to unionized shops.
  • There's debate on PLAs' cost-effectiveness and political motivations.


Federal Infrastructure Acts Mandate Project Labor Agreements

If you’ve read the Code & Regulation Roundup, you'll know a significant portion of federal infrastructure funding from acts like the Inflation Reduction Act and the CHIPS and Science Act requires Project Labor Agreements (PLAs).

PLAs are distinctive collective bargaining agreements within the construction industry. These agreements between project owners/employers and labor unions apply to all contractors and sub-contractors, including MEP contractors, on a project. Employers benefit from no-strike clauses and conflict arbitration procedures, while unions secure guaranteed wages and benefits, often becoming the exclusive source of skilled labor through their union halls.

Open shops or merit shops, where workers may or may not be union members, often can't bid on government-funded jobs, a practice criticized by the merit-shop association, Associated Builders and Contractors, as discriminatory and anti-competitive.

Key points to consider:

Workers under PLAs aren't required to join unions to work on sites or receive job referrals through hiring halls. Additionally, it's illegal for unions to discriminate against non-union workers in hiring referrals.

PLAs are specific to large-scale projects with federal costs estimated at $35 million or more.

While this seems a concern for management, federal funding is taxpayer money, raising the question: do PLAs deliver better outcomes or lower costs?

The answer varies. ABC claims PLAs exclude 90% of the workforce, escalating project costs by 12% to 20%. In contrast, the Department of Labor’s PLAs guide suggests they reduce costs by streamlining administration, providing skilled workers, and averting labor disputes.

Although the Biden Administration promotes PLAs for fiscal reasons, it also supports unions politically. White, blue-collar men without degrees have drifted from the Democratic party for years. Union workers, fitting this demographic, are critical for regaining this voter base.

However, success is uncertain. The International Brotherhood of Teamsters, a significant union, recently announced no majority support for Vice President Harris or President Trump and won't endorse either.

What's the correct path? Current PLA-related lawsuits suggest courts will have the final say. Personally, my concern is ensuring funds benefit the actual workforce, but it’s unclear if PLAs achieve this.

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