Missouri Bans the Use of Project Labor Agreements
Last week, Missouri Governor Eric Greitens signed legislations effectively banning the use of project labor agreements (PLAs) on public construction projects. The new legislations basically extends the current ban on state agencies from requiring PLAs to also cover local governments. Previously, state and local agencies were barred from mandating the use of PLAs on projects where the state funded more than 50% of the construction costs.
As a penalty, any agency or local government that requires the use of a Project Labor Agreement on a construction project would be ineligible to receive any state funding or tax credits for two years.
Earlier this year, Governor Scott Walker of Wisconsin and Governor Terry Branstad of Iowa both signed legislation banning state-mandated project labor agreements. The Iowa bill reinforces an executive order signed by Governor Branstad back in 2011 and extends to local governments who fund their own projects.
They join a growing list of states that have barred the use of PLAs that include: Alabama, Arizona, Arkansas, Georgia, Idaho, Kansas, Louisiana, Michigan, Mississippi, Montana, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia and West Virginia. States with limited union representation or with right-to-work laws typically have laws barring the use of PLAs on public projects.
Opponents of PLAs claim they are anti-competitive and inflate construction costs. Because PLAs often rely on a union or unions to act as representatives for employees, nonunion contractors are less likely to bid on these projects. Contractors are not involved in negotiating PLAs like they are in traditional collective bargaining agreements.
Legislation that would prevent government agencies from being able to mandate the use of PLAs on federally funded construction projects has again been introduced in both the House and Senate.
The Fair and Open Competition Act (H.R. 1552/S. 622) was introduced by the 115th Congress this year. The House version has been reported out of committee. Similar bills have been introduced during the past nine Congresses with none of them getting passed.
The website GovTrack.us, which tracks federal legislation, gives the House bill a 1% chance of being enacted. The Senate version fares slightly better with a 2% chance of being enacted.