A project labor agreement (PLA) is a “pre-hire” collective bargaining agreement with one or more labor unions that establishes the working conditions on a specific, usually public, construction project. PLAs are controversial, not least because they typically restrict nonunion contractors from using their own workforce and require them instead to hire their workforce from the local unions’ labor pool, but their previous use on public projects in Pennsylvania has been upheld. However, in a recent case brought by two nonunion contractors, the Commonwealth Court has now invalidated the use of a PLA on a public highway project as a violation of Pennsylvania’s strict competitive bidding requirements for public contracts.
In December 2017, the Pennsylvania Department of Transportation (PennDOT) issued a bid for a highway improvement project for US Route 202 in Norristown. The bid required the winning contractor to sign a PLA with the Building and Construction Council of Philadelphia and Vicinity, which represented 11 local unions. The PLA required the winning contractor to hire their workforce through the local unions and to be bound by the local unions’ collective bargaining agreements. However, the PLA also specified that, if the winning contractor had a collective bargaining agreement with the United Steelworkers union, which was not one of the 11 local unions, then the contractor was permitted to use its own workforce.
Allan Myers, L.P. (Myers) and J.D. Eckman, Inc. (Eckman), two nonunion contractors, filed protests with PennDOT, challenging the use of the PLA. Myers and Eckman argued that the PLA was unlawful, arbitrary and discriminatory, as it disfavored nonunion contractors and unduly favored contractors affiliated with United Steelworkers. PennDOT disagreed, arguing that case law supported the use of a PLA on a public works project. The protests were denied, and Myers and Eckman then appealed to the Commonwealth Court. Read more