Lawmakers, Governor Seeking To Get Project Labor Agreement Ban Back In Place

Dual efforts are underway in Michigan to reinstate a law prohibiting government mandated Project Labor Agreements on public construction projects.

On one front is an effort in the courts; the other is in the Legislature.

PLA's are pre-hire specifications for construction projects that virtually eliminate non-union contractors from the bidding process. They do this by mandating requirements that only fit union guidelines and practices, which typically come at a higher cost to the taxpayers who pay the bill.

Michigan’s Fair and Open Competition in Governmental Construction Act (2011 Public Act 98) was passed by the legislature last year. Gov. Rick Snyder signed it into law in July. It was one of the many changes Snyder and Republicans made to undo some of systemic advantages unions had gotten put into law over previous decades.

Unions oppose making such changes and filed a lawsuit over the new PLA law.

In early March, U.S. District Judge Victoria Roberts came down on the side of the unions, ruling that the state's PLA ban violated federal law, which “explicitly allows for PLAs in the construction industry.” Due to her ruling, Michigan's law against mandated PLA's is no longer in force.

Michigan Attorney General Bill Schuette has appealed the ruling.

In February 2001, then-President George W. Bush issued an executive order banning government mandated PLAs on federal construction projects. A lower federal court initially ruled against Bush's ban, but at the Federal Court of Appeals level the ruling was reversed and Bush's PLA policy was upheld.

After Barack Obama was sworn in as president in 2009, he switched White House policy back to one that encourages the use of PLAs. However, this is not expected to affect court interpretations of the PLA issue.

The Associated Builders and Contractors of Michigan has denounced Judge Roberts' ruling and expressed optimism that the law would be upheld upon appeal.

“This ruling was wrongly decided,” said ABC President Chris Fisher. “It  is in direct conflict with the Washington, D.C. Circuit’s favorable decision, which upheld President George W. Bush's 2001 Executive Order prohibiting government-mandated PLAs and discrimination on the basis of union affiliation. In light of this, we have much optimism that this flawed ruling will be struck down on appeal.” 

Meanwhile, legislation (Senate Bill 1085) on the PLA issue was introduced in the Michigan legislature last week and has already been reported out of committee and sent to full Senate. This new legislation was drafted to make the legislature's intentions regarding the PLA ban clear to the courts.

More specifically, language in Senate Bill 1085 clarifies that taxpayer money is spent in the most efficient manner and not subject to pre-set constraints.

Senate Bill 1085 directs the issue toward best use of taxpayer dollars and access to open bidding.

In addition, Senate Bill 1085 has language that more closely mirrors the 2001 executive order by President Bush to prohibit the use of government-mandated PLAs on federal contracts. It's believed adoption of Senate Bill 1085 could put Michigan's new law on a faster track to being upheld in the courts.

"Senate Bill 1085 is necessary legislation to protect the Fair and Open Competition Act, which has opened up governmental contracts to all contractors, regardless of labor affiliation," Fisher said. "Not only does it level the playing field for all workers and businesses, but it also guarantees fiscal accountability on construction projects paid for by public tax dollars."

State Sen. John Moolenaar, R-Midland, is the primary sponsor of Senate Bill 1085, which has 25 co-sponsors.

“This bill is a clarification,” Sen. Moolenar said. “We are confident that the original law will ultimately be reinstated and that it is constitutional. With Senate Bill 1085 we are making every effort to clarify our intentions so they can't be misrepresented in the future.”

Patrick Devlin, Secretary Treasurer of the Michigan Building and Construction Trades Council, did not return phone calls seeking comment.