U.S. Supreme Court Declines Opportunity to Kill Project Labor Agreements

Contributed by Beverly Alfon

First, what is a project labor agreement? A project labor agreement (PLA) is essentially a pre-hire collective bargaining agreement that sets all terms and conditions of employment on an entire construction project. In short, PLAs require all contractors performing work on a particular project to be or become union. PLAs are particularly controversial when public officials exercise executive powers and “encourage” the use of PLAs for publicly funded projects. Unions have aggressively pursued PLAs on public projects since the U.S. Supreme Court upheld their legality eighteen years ago.

In Boston Harbor, the court was faced with the question of whether the National Labor Relations Act (NLRA) preempted a government requirement that a project proceed under a project PLA (Building & Construction Trades Council v. Associated Builders and Contractors). The court answered with a resounding “no,” reasoning that when a governmental entity acts as a market participant building a project, rather than a regulator setting rules for labor relations, a PLA is not prohibited by the NLRA.

Fast forward to 2011 and the theory of federal preemption of PLAs remains just that – a theory. InBertelan v. Rancho Santiago Community College District, U.S., the Supreme Court declined to review a decision by a lower appeals court that followed Boston Harbor, signaling that despite subsequent challenges to the reasoning of that decision, the Supreme Court is not changing its position.

Similar to Boston Harbor, the PLA in Bertelan provided that the signatory unions were the exclusive bargaining agents for all employees, required contractors to use union hiring halls to obtain workers, and further required all workers on covered projects to start paying union dues within seven days of their employment. The PLA also prohibited strikes, picketing and other disruptions. Relying on Boston Harbor, the appeals court affirmed the district court’s ruling that the PLA was not preempted by federal law because the agreement “reflects [the state’s] interest in the efficient procurement of goods and services,” by stabilizing labor relations with the union for the purpose of ensuring no labor disruptions.