Pennsylvania Governor Josh Shapiro issued an executive order this week requiring all state construction projects to include a project labor agreement (PLA).
Such agreements are pre-hire collective-bargaining agreements negotiated between construction unions and construction contractors that establish the terms and conditions of employment for construction projects, according to the U.S. Department of Labor.
The order looks a lot like the executive order President Joe Biden issued on Feb. 4, 2022, requiring the use of PLAs for federal construction projects.
PLAs typically specify the wages and fringe benefits for all workers on a project and require contractors to hire workers through a union hiring hall.
In a letter to agency heads, Mr. Shapiro directed that, effective April 1, all agencies under the governor’s jurisdiction should examine all contract solicitations to determine if use of a PLA is appropriate and allowed.
“Pennsylvania law permits the inclusion of PLAs in certain solicitations, provided they do not preclude any contractor from bidding on the project,” the letter reads. “The bidding process is open to both union and non-union contracts without discrimination, and the use of non-union labor is allowed.”
While non-union companies will still be able to bid on projects, it is less likely they will get the work because of the criteria Mr. Shapiro has put in place. He says PLAs are called for when the project must be completed on time or there are concerns about the availability of qualified labor.
Mr. Shapiro has instructed the Department of General Services (DGS) to work with state agencies to proactively attach PLAs to solicitations where DGS and the agency jointly establish “the need for urgency of the project, recognize the complexity of the project, or validate concerns regarding the availability of qualified labor.”
The Pennsylvania Department of Transportation (PennDOT), which deals with many contractors for road and bridge construction, is instructed to proactively attach PLAs to solicitations under the agency’s purview if a project meets any of those requirements.
“With your support in implementing this process. I’m fully confident that we can strengthen our economy, our infrastructure, and our labor standards for all Pennsylvania residents and visitors,” the letter reads.
The Pennsylvania Chamber of Business and Industry responded with concern that the executive order could cut non-union businesses out of government contracts.
Chamber Senior Vice President for Government Affairs Alex Halper said requiring state agencies to attach PLAs to contracts for state projects is problematic because PLAs typically require private companies to commit to using unionized labor as a prerequisite to be considered for contracts to work on a public construction project.
“We will carefully review the details of this directive and how it’s implemented, and we appreciate the governor stating that bidding processes will be open to both union and non-union contractors,“ Mr. Halper said in a statement. ”In our experience, however, PLAs have historically been used to force companies whose employees are not members of a union to either forgo bidding on a project or be forced to replace their own employees with a union. This type of mandate is unfair, and it discriminates against a significant portion of private sector workers who opt to not be represented by a union.”
He said the state should instead consider bids for public projects based on merit and cost effectiveness.
“Project labor agreements ... have been shown to raise projects costs with no discernible benefit to safety, or keeping projects on-time and on-budget,” Mr. Halper said.
Labor unions were among the top contributors to Mr. Shapiros election, including the Laborers Union, Carpenters & Joiners Union, the International Brotherhood of Electrical Workers, the Sheet Metal Workers Union, Plumbers & Steamfitters Local 449, Bricklayers & Allied Crafterworkers Local 1, and the Teamsters Union.
