Unions target Santa Clara Water District for pricey, exclusionary PLA
A major vote is coming up on May 26 at the Santa Clara Valley Water District regarding the widely panned concept of Project Labor Agreements (PLAs). Nicole Goehring, V.P. Govt. and Community Relations for Associated Builders and Contractors Northern California Chapter (ABC Norcal), explains the issues.
Opportunity Now: What is Santa Clara Valley Water debating on May 26?
Nicole Goehring: The Santa Clara Valley Water District is considering a Project Labor Agreement on May 26 which will give construction unions a monopoly on 100% of the work. At stake is $6.4B in Capital Improvement Projects.
ON: What is a Project Labor Agreement (PLA)?
NG: Anti-competitive and costly government-mandated project labor agreements (PLAs) are introduced as a tool to local school, city, county, state and federal officials by State and Local Building and Construction Trades Council Representatives to end open, fair and competitive bidding on contracts to build taxpayer-funded construction projects. Exclusionary in nature, government mandated PLAs discourage the vast majority of local contractors and small business owners from competing on and winning construction projects in their communities and drive up costs between 12 percent and 18 percent, which results in fewer infrastructure improvements and reduced construction industry job creation.
This strikes most people as odd, as under the National Labor Relations Act, construction contractors and employees have the right to choose to unionize or not to unionize. And most – more than 80 percent – have opted against unionization.
This is trouble for unions, so they have asked politicians to remove that choice and force unionization on employees from the top down. The method by which this is done is a project labor agreement, which is also frequently referred to as a "PLA."
The PLA forces all contractors, whether they are unionized or not, to become unionized in order to work on a government-funded construction project.
Though all contractors are technically free to bid on construction contracts subject to government-mandated PLAs, the terms of a PLA typically force contractors to recognize unions as the representatives of their employees on a job; use the union hiring hall to obtain workers; hire apprentices exclusively through union apprenticeship programs; pay fringe benefits into union-managed benefits and multi-employer pension programs; and obey the unions’ restrictive and inefficient work rules and job classifications.
PLAs force employees to pay union dues, accept unwanted union representation and forfeit benefits earned during the life of a PLA project unless they join a union and become vested in union benefits plans. PLAs harm local workers. Though PLA proponents claim PLAs ensure the use of local workers, they fail to mention that nearly all PLAs require contractors to get most or all of their workers from union hiring halls, where dispatch rules prioritize non-local union workers ahead of local nonunion workers.
ON: What's the history behind the Water District's labor policies?
NG: For years, the Santa Clara Valley Water District has operated with a construction bidding policy that ensured a fair playing field regardless of labor affiliation and delivered quality workmanship our community could count on.
Of the SCVWD Capitol Construction Projects awarded between August 2013 and July 2018, 63% were awarded to union contractors and 34% to non-union contractors. What is the urgency for the Santa Clara Valley Water District to give up 34% of its contractors now in order to make construction projects more expensive for taxpayers and give construction unions a monopoly on 100% of the work?
ON: It sounds like there's a lot of debate about PLAs
NG: Project Labor Agreements are one of the most controversial topics in the construction industry. Every survey that has ever been conducted shows that PLAs reduce competition and increase costs.
ON: So I can see how unions benefit, but how do PLAs impact other stakeholders?
NG: PLAs create barriers for local, minority and women-owned construction employers and their employees from participating in building their community because they contain provisions that do not allow for the full utilization of their own workforces and force union-free workers to pay into union pension plans they will never vest in. This is wage theft.
ON: For taxpayers, what's the impact of the PLAs?
NG: Numerous academic studies of public construction projects already subject to government-determined prevailing wage laws indicate PLAs increase the cost of construction between 12 percent and 18 percent when compared to similar projects not subject to union-only PLAs.. Open competition is healthy and increases quality. It levels the playing field and local money is invested into the community.
ON: What if you're in a non-union apprenticeship program?
NG: PLAs exclude the men, women, and veterans who have chosen to enter into state approved, unilateral apprenticeship training programs in pursuit of a construction career from the opportunity to work and gain the invaluable on-the-job training experience that provides stability for them, their family and their community.
ON: So how have the trades council and construction trade organizations responded to the prospect of PLAs?
NG: Almost Every Construction Trade Organization opposes PLAs. Here are some examples:
• Air Conditioning and Trades Association
• American Subcontractors Association
• California Subcontractors Association
• American Road Builders and Transportation Association
• Asian American Contractors Association
• Associated Builders and Contractors
• Associated General Contractors
• Black Contractors Association
• Bay Area Black Contractors Association
• Californians for the Advancement of Apprenticeship & Training
• Golden State Builder's Exchanges
• Independent Roofing Contractors of California
• Independent Electrical Contractors Association
• Kern Minority Contractors Association
• National Association of Minority Contractors
• National Association of Women in Construction
• Painting Decorating Contractors Association
• Plumbing and Heating Cooling Contractors of California
• Western Electrical Contractors Association
• Independent Electrical Contractors Association
ON: It sounds like PLAs are going to make local government finances even worse. What's the impact on municipal budgets?
NG: A July 2011 study released by the National University System Institute for Policy Research revealed that California School Construction costs went up 13-15% because of PLAs. No studies exist that show PLAs save money. 11 entities in California have banned the use of PLAs including the cities of Fresno, San Diego, Chula Vista, Oceanside and El Cajon
ON: So what's your recommendation going forward?
NG: • Continue bidding without PLAs and keep FAIR and OPEN competition
• ALL sides should be represented in any negotiations
• Allow for ALL state approved apprentices to work on the project
• Allow contractors to hire their entire CORE workforce
• Allow contractors to pay health and pension benefits into their employees’ OWN plans to care for them and their families – see excerpts from Fair PLA below passed in the City of San Jose
• Use an alternate bid approach
• Rebid the project WITHOUT a PLA if there are three bidders or less on project
• Set a HIGH Local Hire goal that benefits the workers in the community
• Establish metrics for PROPER PLA compliance, accountability, and transparency
• The City of San Jose originally had it right in 2017 when they set out to work with all stakeholders to pass the first of its kind “Fair” PLA Agreement – other local governments including the Santa Clara Valley Water District should follow suit
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