Project Labor Agreements: They’re Back – At Least For Now

In July 2011, we reported on Public Act 98, which essentially prohibited the use of Project Labor Agreements (PLAs)  on all publicly funded construction projects (see here).  Since most of those projects are subject to the federal Davis-Bacon Act's prevailing wage provisions, or those of the companion Michigan Act, the chief significance of PA 98 was simply relief to contractors from the PLA requirement they be signatory to a Building Trades Union Agreement.  PA 98 had no application to projects or PLAs already in existence at the time of its passage; nor did it prevent or prohibit PLAs on privately-funded projects.

By order dated February 29, 2012, however, enforcement of PA 98 has been enjoined by the U.S. District Court for the Eastern District of Michigan.  Mich Bldg & Constr Trades Council v Snyder, (ED Mich 2/29/12).  In an Opinion authored by District Judge Victoria Roberts, the District Court found the Michigan statute is a state regulation of labor relations preempted by federal law, specifically the National Labor Relations Act and the U.S. Constitution's Supremacy Clause.  The District Court placed specific emphasis on the NLRA's protection of collective bargaining as protected activity, as well as its express authorization of pre-hire agreements in the construction industry.

So for now, the State, the various subordinate governmental entities, school districts and other public entities may once again fund projects that include the requirement of a PLA.  The Snyder Administration and other interested parties, most notably the Associated Builders and Contractors of Michigan, are currently weighing their options, which include a request for rehearing at the District Court or an appeal to the Sixth Circuit Court of Appeals.