Differing Opinions About the Use of PLAs Could Lead to Legal Action

One of most high profile construction projects in the Washington, D.C. metropolitan area appears to be eliciting strong opinions from local and state political figures. At issue is the Metropolitan Washington Airports Authority’s (MWAA) decision to require the use of a project labor agreement (PLA) on the second phase (“Phase 2”) of the 23-mile extension of Metrorail to Washington Dulles International Airport in Loudoun County, Virginia. The MWAA’s decision to require the use of a PLA for Phase 2 of the Metrorail expansion is being debated among various local and state lawmakers in Virginia, with the issue becoming a matter of increased discussion prior to the upcoming election cycle. The required use of a PLA on Phase 2 has even led to a threat of possible legal action by Virginia’s attorney general.

Differing Opinions of PLAs

A PLA is a collectively-bargained agreement that preliminarily delineates the prevailing labor rates, practices and other standards for a construction project’s labor force. The use of a PLA has its share of both supporters and opponents. Those in favor of PLAs contend that a PLA ensures adequate manpower and increased productivity. Conversely, those opposed to PLAs assert that a PLA unfairly restricts the available labor pool by requiring the use of a union labor force, thereby fostering higher labor costs. While PLAs historically have been used on private construction projects, there has been an increase in the use of PLAs on public construction projects. This increase in the public sector, and specifically for federal construction projects, can be traced to the Obama Administration’s effort to expand the use of PLAs on federal construction jobs.

Federal Agencies Encouraged to Use PLAs by the Obama Administration

On February 6, 2009, President Obama signed Executive Order 13502 (“E.O.”) “encourag[ing]” federal agencies to consider using PLAs on large federal projects. Specifically, the E.O. states that executive agencies responsible for awarding contracts on “large scale construction projects” using more than $25 million in federal funds “may, on a project-by-project basis, require the use of a project labor agreement” by the contractor. The E.O. defines a PLA as “a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f).” The E.O. also states that a federal agency’s utilization of a PLA during construction “advance[s] the Federal Government’s interest in achieving economy and efficiency in Federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters[.]” While not requiring the use of PLAs on federal construction projects, the E.O. makes it clear that PLAs should be used if practicable.

Multifaceted Issues to Consider

Despite the fact that the Metrorail expansion project is not funded exclusively by the federal government, the large influx of federal dollars has influenced the utilization of a PLA on the project – specifically the requisite use on the Phase 2 portion. Those in favor of the PLA on Phase 2 maintain that the agreement ensures competitive and fair wages for the workers, as well as a project delivery that is on budget and on time. On the other hand, those opposed to the use of a PLA on the Metrorail expansion project argue that the use of the PLA closes the door on the ability to foster competitive labor pricing on this phase of construction by disqualifying all non-union contractors. Opponents assert that the elimination of non-union contractors takes away Virginia jobs and therefore runs contrary to Virginia’s right-to-work law. The allegations concerning a possible violation of the right-to-work law has prompted Virginia Attorney General Ken Cuccinelli to threaten legal action against the MWAA over the use of the PLA on Phase 2.

Given the divergent viewpoints regarding the requisite use of a PLA for Phase 2 of the Metrorail expansion project, this issue will certainly continue to generate interest and discussion for the foreseeable future.