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Court frowns on Pennsylvania project labor agreement mandate

Contractors Allan Myers and J.D. Eckman Inc. prevailed in Commonwealth Court of Pennsylvania last month in a challenge to Pennsylvania Department of Transportation’s project labor agreement mandate for a Montgomery County street reconstruction. Tried in the Commonwealth Court of Pennsylvania, the court ruled that the mandate violates competitive bidding laws and discriminates against nonunion contractors—in a state where less than a quarter of the construction workforce is unionized.

“The court correctly recognized that government-mandated PLAs effectively exclude merit shop contractors and their skilled employees from building projects in their own communities paid for by their own tax dollars,” says ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “This ruling will help ensure the project is procured via fair and open competition and will benefit local construction workers, contractors and taxpayers.”

PennDOT’s bid solicitation for a second phase of Markley Street reconstruction required contractors to execute a PLA agreement with the Building and Construction Council of Philadelphia and Vicinity or the United Steel Workers (USW), which would have precluded nonunion contractors from using their own workers to staff the project. As a result, merit shop contractors like Allan Myers and J.D. Eckman were unable to effectively bid on the contract, restricting competition.

“By requiring the winning bidder to hire all craft labor personnel through the local unions, the PLA introduced ‘uncertainty in bidding the job’ for prequalified nonunion contractors,” Judge Mary Hannah Leavitt said in the ruling. “Notwithstanding (its) lip service to the principle of competitive bidding, the PLA does not place nonunion contractors on ‘an equal footing’ with union contractors.”

She also recognized J.D. Eckman for its work on Markley Street project phase one, which was successfully completed a year ahead of schedule and on budget without a PLA. In August 2017, PennDOT issued the solicitation that contained a PLA requirement for the second phase. Following public opposition from ABC against PennDOT Secretary Leslie Richards’ decision to impose a PLA mandate and a bid protest filed by plaintiff contractors, PennDOT withdrew the solicitation and issued a new one in December 2017. The latter carried a PLA mandate involving 11 Building and Construction Council locals, but allowed bidders to honor any collective bargaining agreements they had with the USW for the Markley Street work.

“PLAs are discriminatory toward merit shop contractors, which make up an overwhelming majority of Pennsylvania’s construction industry,” says ABC Keystone Chapter CEO G. David Sload. “This is an important step toward instituting a free-enterprise approach to public works contracting.”

Nationwide, ABC notes, PLA mandates a) discriminate against the 86 percent of private-sector construction workers who choose not to join a union; and, b) can increase construction costs by 12 percent to 18 percent, resulting in fewer infrastructure projects and reduced construction industry job creation. The group underscores a changing tide since 2009, when President Barack Obama issued Executive Order 13502 promoting PLA on government-funded construction, as 24 states have adopted legislation or executive orders ensuring fair and open competition on state and local taxpayer-funded projects.