Michigan Law Banning PLAs Ruled Unconstitutional


March 2, 2012



Michigan Law Banning PLAs

Ruled Unconstitutional


In a great win for working people, a federal court has overturned a law signed by the Republican Governor of Michigan that banned the use of PLAs in public construction projects.


U.S. District Judge Victoria Roberts ruled that the PLA ban violated federal laws that “explicitly allow for PLAs in the construction industry.”  She also noted that the law’s defenders had failed to demonstrate any cost savings resulting from banning PLAs.

The decision of the federal court calls into doubt the constitutionality of local PLA bans imposed by cities and counties in California.  Here is a news report about the decision, followed by a link to the Michigan News website.

DETROIT – A law signed by Governor Rick Snyder banning the use of project labor agreements in public constructions projects is unconstitutional, a federal judge ruled Wednesday in striking down the law.

U.S. District Judge Victoria A. Roberts of the Eastern District of Michigan ruled in favor of the Michigan Building and Construction Trades Council and the Genesee, Lapeer, Shiawassee Building and Construction Trades Council in their suit against Snyder.

Roberts ruled that the ban violated federal law, which "explicitly allows for PLAs in the construction industry."

PLAs are collective bargaining agreements with one or more labor unions that establish the wages and benefits for workers on a particular project.  Unions say the agreements provide a standardization of work rules, hours and other factors, giving contractors more control over the project.

The state could appeal the decision to the Sixth Circuit Court of Appeals.

One union spokesperson thought an appeal would be futile.

"Since it's being struck down as unconstitutional, they may choose to leave it alone and not waste the taxpayers' money," said Lisa Canada, spokesperson for the International Union of Operating Engineers (IUOE) Local 324, which took part in the lawsuit.

Governor Snyder signed the ban into effect on July 19, 2011, as the "Fair and Open Competition in Governmental Construction Act."

In her ruling, Roberts disputed that the laws intent was to level the playing field.

"The problem with the Michigan Legislature's attempt to impose its own definition of fairness on labor relations is that Congress already decided what the proper balance of power should be between unions and employers when it amended the (National Labor Relations Act) in 1959," Roberts wrote.  "Here, 'fairness' is a disguised way for the State to upset the balance of power established by Congress."

Labor leaders lauded the decision.

"Judge Roberts' ruling is a clear victory for Michigan small businesses, workers and taxpayers," John Hamilton, general vice president and business manager for the IUOE, said in a statement.

"The Legislature's ban of PLAs came as a result of heavy lobbying by some low-quality construction contractors who didn't want to be held accountable for their work... . When taxpayers are footing the bill for a construction project, they deserve the right to hold contractors accountable," Hamilton said.

Ari Adler, spokesman for Speaker of the House Jase Bolger (R-Marshall), said the ban would end up costing taxpayers more money until the state Legislature could find a way to enact the ban once again.

"Discriminating against 75% of the state's construction workforce when doing government projects is not the best way to protect the money provided by hardworking taxpayers," Adler said.

However, in her ruling, Roberts said state lawmakers never proved that PLAs increased costs for taxpayers, citing the House Fiscal Agency's legislative analysis of the bill, which found the bill would have no clear fiscal impact, and characterized the research on the cost impact of PLAs as mixed.

"The fact that the Legislature was unaware of any cost savings the Act would bring strengthens the inference that it was motivated by concerns for labor policy," Roberts wrote.


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