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Are You Impacted by the Project Labor Agreement Executive Order?

Client Alert

A primer on PLAs and what you need to know

What are Project Labor Agreements? 

Project Labor Agreements (PLAs) are a quasi-collective bargaining agreement between employers and unions. They establish the terms and conditions of employment, including dispute resolution. They are put into place on specific projects and apply to the contractor, whether it is union or non-union. Employees hired on the project will be treated as union. 

Why do I need to know about Project Labor Agreements? 

President Biden, on February 4, 2022, issued an executive order mandating that all federal construction projects valued at $35 million or more must use a PLA. The terms of the PLA will apply to all contractors associated with the project. 

What was the purpose for the Executive Order? 

According to the President’s order, the purposes of the PLA mandate are to improve timeliness, lower costs, increase quality, implement consistent labor terms, and establish a common dispute resolution mechanism. 

Why are PLAs mandated now? 

PLAs have been encouraged (but not required) since 2009 on federal construction projects worth $25 million or more. However, PLAs were infrequently used under the Obama administration, and never under the Trump administration. Biden has repeatedly promised measures to increase union membership, and this executive order falls in line with that goal. 

Are there overall problems with PLAs?

Historically, PLAs diminish competition. Many contractors, including most small contractors and subcontractors, have not had any experience dealing with unions and collective bargaining agreements. The non-union contractors will stay away from projects with PLAs.  According to the Bureau of Labor Statistics, approximately 86% of people working in construction in 2021 were either not a member of a union or not represented by a union. If the non-union contractors and subs avoid the federal projects, the level of pricing competition will be significantly diminished. Additionally, with the limited availability of construction workers in general, it will be difficult to overcome the labor shortage by disincentivizing contractor participation.  The executive order allows for exceptions in unusual and compelling situations, such as the lack of bidders. 

What are practical problems with PLAs? 

A PLA implements a set of rules which must be followed in directing your workforce. That set of rules can be simple or can be comprehensive. The enforcement of the rules by the trade unions can be informal or can be strict and demanding. The overall relationship with the trade unions can be mutually beneficial or can be adversarial.  The problem is that, nonunion employers and PLA newbies will not know what disruptions a PLA can cause. 

What should contractors consider with PLAs?

Many projects with PLAs go through bidding to completion without any issues whatsoever. Others have on-going disruptions, followed by unionization efforts at the conclusion of the project. 

For contractors who are willing to enter into PLAs in exchange for the federal construction work, the expected limit of competition should lead to higher bids which would alleviate the potential disruption of a PLA. 

Additionally, PLAs should be negotiated by the project manager or general contractor. Ordinarily, those entities will have experience with the trade unions and can negotiate common sense provisions. 

Finally, many PLAs are not too disruptive. The most important provisions are on wages, benefits, hours of work and overtime. The standard deviation between union and non-union is rarely severe. 

As long as a contractor understands the terms of the PLA, negotiates best terms when applicable, and always maximizes the benefits, it can be used to the contractor’s benefit. 

For additional information on Project Labor Agreements or any Labor + Employment matters, please contact Jeffrey C. Miller, jcmiller@bmdllc.com, 216.658.2323 or any member of the BMD L+E Team.


Governor Mike DeWine and The Ohio State University Introduce the SOAR Study on Ohio Mental Illness

On January 19, Ohio Gov. Mike DeWine and The Ohio State University announced a new research initiative, the State of Ohio Adversity and Resilience (“SOAR”) study, which will investigate all factors influencing Ohio’s mental illness and addiction epidemic.

CHANGING TIDES: Summary and Effects of Burnett et. al. v. National Ass’n of Realtors, et. al.

In April 2019, a class-action Complaint was filed in federal court for the Western District Court for Missouri arguing that the traditional payment agreements employed by many across the United States amounted to conspiracy resulting in the artificial increase in brokerage commissions. Plaintiffs, a class-action group comprised of sellers, argued that they paid excessive brokerage commissions upon the sale of their home as a result of the customary payment structure where Sellers agree to pay the full commission on the sale of their property, with Seller’s agent notating the portion of commission they are willing to pay to a Buyer’s agent at closing on the MLS or other similar system.

The Ohio Board of Pharmacy’s Latest Batch of Rules: What Providers Should Know

The Ohio Board of Pharmacy released several new rules and proposed amendments to existing rules over the past month that will significantly impact pharmacy operations. Topics range from updates to the Terminal Distributor of Dangerous Drugs license to mobile clinics to mandatory rest breaks for pharmacists of outpatient pharmacies. A summary of the proposed changes is below, along with instructions for commenting on the rules. Your BMD healthcare attorney can help write comment letters and submit the comments on your behalf as well.

Employee or Independent Contractor? New Guidance Issued by the Department of Labor

On January 9, 2024, the U.S. Department of Labor (DOL) issued its long-awaited final rule — effective March 11, 2024 — revising its prior interpretation of worker classifications under the federal Fair Labor Standards Act (FLSA). The new final rule rescinds the standard previously established in 2021, in turn, shifting the analysis of whether a worker is an employee (versus an independent contractor) of a business from a more streamlined “economic reality” test to a more complex “totality of the circumstances” standard.

Increased Medicaid Rates to Take Effect This Month for Ohio Providers

As required by House Bill 33, Ohio’s 2024-2025 operating budget bill, reimbursement rates paid by the Ohio Department of Medicaid will increase for a wide range of providers starting on January 1, 2024.