The federal government Tuesday officially shifted toward project labor agreements, confirming the fears of nonunion contractors.
Starting May 13, federal agencies can require PLAs on projects that receive more than $25 million in federal money.
Mike Zignego, secretary/treasurer for Zignego Co. Inc., Waukesha, said he does not like the prospect of PLAs on highway jobs because his company is a nonunion road builder. A PLA on major road projects in Wisconsin would mean his company would have to sign a collective bargaining agreement before getting a shot at the work.
“There’s no point in having it to our firm,” he said. “I can tell you that. I can see it being very beneficial to union firms.”
PLAs are unlikely to greatly affect competition for highway work in Wisconsin, but they could increase worker benefits, said Terry McGowan, business manager for the International Union of Operating Engineers Local 139. McGowan estimated about 95 percent of Wisconsin’s highway contractors already are union. They are required by Local 139 collective bargaining agreements to subcontract only with union builders, he said.
“Nobody is going to notice any difference,” he said. “There may be some nonunion prime contractors that are going to be frustrated.”
According to the federal rules, a PLA is an agreement between contractors and labor organizations preventing strikes and setting procedures to settle labor disputes. According to the rules, PLAs are banned from discriminating against companies without collective bargaining agreements with labor unions.
But, over the past year as federal agencies drafted a PLA rule change, the agreements have been criticized by groups, such as the Associated Builders and Contractors of America, as a tool to make nonunion builders less competitive.
One place where McGowan and critics of the PLAs agree is that the agreements will not have a big affect preventing labor disputes and strikes on public projects. In Wisconsin, strikes simply don’t happen on public jobs, said Steve Stone, president of the ABC of Wisconsin. He said he opposes PLAs and sees them as unjustified.
“Usually work stoppages occur over a dispute over the wages paid,” he said, “and usually on a public project there’s the same wages paid.”
Charles Palmer, a construction attorney at the Waukesha office of Michael Best & Friedrich LLP, said he cannot remember any major projects that were stopped by strikes. Union companies dominate the Wisconsin market for large public works projects, he said, and their collective bargaining agreements prevent strikes.
“Traditionally, a lot of public works projects have been done by union contractors anyway,” Palmer said. “So the PLAs just do what already has been done on a lot of public works contracts.”
Zignego said the potential for PLAs to limit his company’s ability to compete for highway jobs depends on what the agreements require. However, he said, he sees the potential for the agreements to limit open competition.
“I don’t know why they’re passing this, No. 1,” Zignego said. “All of the agencies right now are getting tremendous bargains in terms of contracts.”[polldaddy poll=”3050928″]