Dive Brief:

• The Minnesota/North Dakota Chapter of the Associated Builders and Contractors (Minnesota ABC) has filed a lawsuit against the Minneapolis Public Schools district over what the organization characterizes as an unconstitutional requirement that district contractors use union labor.
• The trade group argues that even prior to bidding on district work, contractors must sign on to project labor agreements. The PLAs require construction firms to hire union workers and pay into fringe benefit programs, two factors that sometimes negatively impact the contractors’ own employees. Low bidders don’t qualify for a contract if they don’t accept the terms of the district’s PLA, which was negotiated by the district with local unions back in 2004. 
• The Minnesota ABC, along with co-plaintiff Laketown Electric Corp., based in Waconia, Minnesota, claim that open-shop construction companies will potentially miss out on profits from the $66 million a year the school district spends on construction and maintenance contracts and have asked the court to stop the district from including the union labor and fringe benefits provisions in its PLA.

Dive Insight:

The ABC has long been opposed to government-mandated PLAs as contrary to its policy of open-shop advocacy, and 24 states, according to the trade group, currently have regulations forbidding their use, although private owners are free to use them if they wish. 

Conversely, unions maintain that PLAs ensure a steady supply of workers to a project, both skilled and with adequate safety training. PLA proponents also argue that these agreements ensure that all workers earn a fair wage and benefits. Some PLAs allow nonunion participation, and trade groups point out that open-shop workers on those jobs also benefit from the effort that they put into securing the best working conditions.

Earlier this month in Pennsylvania, Roads & Bridges reported, a state court ordered the Pennsylvania DOT to cancel a contract award and put one of its projects out for bid again after it determined that the agency’s required PLA violated competitive bidding laws by favoring those contractors affiliated with one specific union and by creating uncertainty in the bidding process. 

In somewhat of a preemptive move, Texas Republicans, backed by the Texas chapter of the ABC, have introduced legislation that would prevent PLAs from being required on state-funded projects there, Construction Citizen reported. State lawmakers held a hearing on the issue this week, and opponents of PLAs outlined what they see as negatives about the agreements despite there never having been such a requirement on a public sector project in Texas. 

Nevertheless, the ABC of Texas and other opponents maintain that it’s better for lawmakers to deal with the issue now than wait for it to become a problem for Texas contractors down the road.