P ro j e c t Labor A Home Run

A Home Run
for Your
Project Labor
A Home Run for
Your Community
The purpose of this booklet, and the accompanying
video, is to show how Project Labor Agreements are
a winning opportunity — not just for workers and
contractors, but also for public and private project
owners, and especially for taxpayers.
We traveled up and down California interviewing
people who have been responsible for billions of
dollars of construction work. They shared why they
decided to use a Project Labor Agreement for their
project, and the benefits that decision has brought.
Pacific Bell Park is referred to as the
miracle on 3rd Street. We delivered a
fantastic ballpark—on time and on
John Yee
Chief Financial Officer
San Francisco Giants
Saving money
for owners
and taxpayers
Project Labor
History of PLAs
Projects completed
with a PLA
Hoover Dam . . . . . . . . . . . . . . . .1931-1936
Grand Coulee Dam . . . . . . . . . . .1933-1942
Shasta Dam . . . . . . . . . . . . . . . . .1938-1945
St. Lawrence Seaway . . . . . . . . . . .1954-1959
Disney World . . . . . . . . . . . . . . . .1967-1971
Trans-Alaska Pipeline . . . . . . . . .1973-1977
NUMMI — Fremont . . . . . . . . . .1983-1984
A Project Labor Agreement (PLA) is a type of pre-hire
agreement designed to facilitate complex construction
projects. Each PLA is negotiated and designed individually – tailored to meet the needs of a specific project or
owner/manager. A product of collective bargaining, PLAs
govern the work rules, pay rates, and dispute resolution
processes for every worker on the project.
PLAs were first used on the big public works projects of
the 1930s. Grand Coulee Dam, Hoover Dam, and Shasta
Dam all were built using a PLA. In those days, virtually
every construction worker belonged to a union. Project
managers foresaw a potentially endless series of labor
negotiations as one contract after another came up for
renewal, causing expensive delays and generating a steady
threat of strikes or other labor actions.
The elegantly simple solution to the problem was to
put all workers under a separate, umbrella contract that
applied only to the specific project. It worked beautifully.
Since then, scores of large projects, public and private, have been built across the nation using PLAs. The
efficient management of these projects has saved taxpayers and investors billions of dollars.
Current PLA Projects
in California
Cities of Sacramento, West Sacramento,
Los Angeles and Concord
Contra Costa Water District
County of Orange
Lawrence Livermore National Laboratory
Los Angeles Unified School District
Metropolitan Water District
Port of Oakland
Sacramento Regional Transit
San Diego Water Authority
San Francisco Airport
Santa Ana Unified School District
Larry Gallagher
Former Director of Risk Management
Metropolitan Water District of
Southern California
Charles Ramsey
The proof is in the pudding – a project
that is virtually on budget with absolutely no labor problems. You can talk
to contractors in Southern California,
union and non-union, in their private
moments they’ll tell you this was one of
the smoothest public works projects
they’ve ever worked on.
I’d like to see PLAs happen in other
school districts because I believe it’s a
good thing. And I know it’s going to
make a difference for all of our
Board Member, West Contra Costa
Unified School District
A good tool for
risk management
PLAs in the
California economy
PLAs at work
The California economy is booming. New citizens are
pouring into the state in record numbers. But the state’s
infrastructure is not prepared for exploding growth. Existing facilities are under strain, showing signs of age and
in need of renovation. New capacity is urgently needed.
Officials charged with meeting the challenges of
growth must spend every dollar wisely. A PLA helps
them do that.
The giant East Side Reservoir Project, built by the
Metropolitan Water District near Hemet, California, used
a PLA. The $2 billion project involved building two dams
to create a 4-1/2 mile long lake. Each day of delay caused
by a labor stoppage would have cost the District $300,000.
In fact, there were no labor delays over the entire life of
the mammoth project, even though there were 20 major
contracting packages involving nearly 150 subcontractors.
The Port of Oakland is using a PLA to cover its
multi-year maritime and airport facilities modernization
program. This is an excellent example of how PLAs are
custom made for individual projects and owners.
In an effort to strengthen its relationship with the local
community and reach out to women and minority contractors and workers, the Port’s PLA includes a “Social
Justice Program.” This unique program works closely with
community agencies to provide aggressive outreach and
pre-apprenticeship training.
Community outreach was also important to the
owners of the San Diego County Water Authority’s
Emergency Storage Project. They made sure their PLA
provided training to disadvantaged young people —
training that could not only be put to use building this
project, but also further developed into a lifetime career.
A Project Labor Agreement represents a meeting of
the minds between the owners of a project and the people who will build it for them. It is an agreement
designed to provide fair and safe working conditions,
bring the project in on time, and save the owner money.
Mark Watton
Board Member
San Diego County Water Authority
As you really understand the
agreement you find out that the
insurance that we’re going to have for
workman’s comp and other things is
really superior—going to save us
money. The safety program is also
really superior.
PLAs: Saving
money for owners
and taxpayers
Establishing a PLA
Who benefits from a PLA?
PLAs by definition are designed to give maximum benefit
to all parties involved.
Workers, union and non union, benefit because their wages
and benefits are protected.
Contractors, union and non-union, benefit from the
assurance of a level playing field, and a skilled workforce is
Lenders and insurers benefit from lowered risk. But the
owner/taxpayer benefits most. The virtual elimination of
costly delays due to labor conflict is a vital factor in completing the project “on time and on budget.”
How are PLAs devised? PLAs are a product of collective bargaining, and are negotiated to meet the needs of the individual project and owner.
Each PLA is unique.
Does a PLA enhance the value Yes. Lenders look more favorably on projects being conof the project? ducted under a PLA because they know the probability of
on time and on budget completion is greatly increased.
Do all projects benefit from a PLA? PLAs are ideal for complex projects that have an extended
construction schedule and involve multiple crafts and
trades. The Agreement can cover one large project or several related smaller projects. Small, relatively simple projects
do not usually need a PLA.
Can a PLA cover more than one project? Yes. PLAs can be used as an umbrella labor agreement for a
series of projects. For instance, a school district could
design a PLA to cover renovation work on several schools.
Are PLAs only good for PLAs are being used successfully by cities, counties, school
billion dollar projects? districts, and private owners to build a wide range of projects. The desire for smooth project coordination, enhanced
by a stable labor base, drives the need for a PLA — not the
size of the project.
Are PLAs limited to new construction? PLAs are used for all types of construction work including
expansion, modernization, maintenance and repair.
Can a PLA extend beyond the Yes. Modern PLAs are frequently designed to cover several
completion of the project? years of maintenance work, after the project is completed.
Tay Yoshitani
First and foremost, we want to make
sure that the money is well invested
and we get the value that we pay for
for. That translates into a facility that
is obviously well designed and is also
very well constructed.
Deputy Director
Port of Oakland
PLAs: Provide
a stable and
trained workforce
Cost Savings
Do PLAs save owners/taxpayers money? Yes. PLAs were devised to eliminate costly labor-caused
delay in large construction projects — and they work.
Millions of dollars are also saved in health and safety costs,
thanks to programs and standards established under a PLA.
How do PLAs generate savings in workers In 1993, the Legislature authorized parties to engage in colcompensation & other insurance benefits? lective bargaining for alternative workers compensation procedures. Only available in the construction industry, these
agreements, known as “carve outs,” allow for Alternative
Dispute Resolution and modified health-care delivery and
claims management procedures, which have drastically
reduced workers compensation costs. For instance, the
Metropolitan Water District estimates the carve out on the
East Side Reservoir project saved $30 million.
What about cost overruns and delays? PLAs are created to minimize cost overruns caused by labor
problems — and their record of performance is superb.
Cost overruns can happen on any project. They are usually
caused by unexpected bad weather or by changes in the
design and planning of the project.
How are labor-caused delays avoided? The central part of every PLA is the “no strike” pledge given
by the workers. Each PLA designs its own system of mediation and arbitration to resolve labor disputes. PLAs exist
independently of local union agreements and are therefore
not affected by local union disputes or organizing efforts.
The Competition Issue
Do Project Labor Agreements shut out Definitely not. On public works projects, the lowest responnon-union contractors and workers? sible bidder wins the contract. Most PLAs expect a mix of
union and non-union workers.
Do PLAs restrict competition? No. Public works projects require that all contractors,
union and non-union, pay the prevailing wage. PLAs create
a level playing field for contractors by standardizing all
labor conditions.
Does a PLA discourage bidding?
No, in fact, many contractors prefer to work on jobs
covered by a PLA. An example is the Southern Nevada
Water Authority’s Improvement Project. It was conducted in
two phases, the first in 1997 without a PLA. The second
phase—begun in 1999 utilizing a PLA— received a 32 percent increase in bids per package.
The PLA creates competition — it
doesn’t restrict it. In fact, had I known
that we would’ve had the success that
we’ve had today, I would have had the
project labor agreement much earlier.
John Palacio
Santa Ana Unified School District
Smart fiscal
Do union hiring halls dispatch workers No. Federal law mandates non-discriminatory dispatching.
based on union membership and seniority?
Do PLAs bring value to the Yes. Project owners can design their PLA to address a wide
community beyond the efficient range of local needs. PLAs can make sure that the project is
building of the project? built by the community’s workers through local hire agreements. Many recent PLAs are initiating community outreach
efforts, enrolling minorities and women in pre-apprenticeship programs. These programs are a first step in the
creation of a lifetime career in the construction industry.
Because local workers build the project, the project’s payroll stays in the community and contributes to its prosperity.
Do non-union workers have to give PLAs set up their own system of benefit management,
up their company benefits if they including health and pension plans, and though non-union
go to work under a PLA? workers are not required to leave their prior benefit programs, most do. The benefit plans set up for PLAs are usually more generous than non-union plans. In fact, many
non-union workers earn the best pay and benefits of their
working lives under a PLA.
Why not have two rates of pay for union PLAs treat every worker equally. No worker makes less for
and non-union? doing the same work. Public works projects mandate the
payment of the prevailing wage, and the oversight systems
built into to a PLA ensure that all wages are paid accurately,
and on time.
Are all PLA’s the same?
In summary . . .
No. Each PLA is negotiated through a process of collective
bargaining and each one is unique, designed to fit the needs
of individual projects and owners.
Project Labor Agreements are negotiated labor agreements,
designed to provide a uniform labor policy for all construction workers involved in the building of a specific project,
or series of projects. As part of the stabilization of wages,
benefits, and working conditions, the workers agree to use
the PLA’s specific dispute resolution process and forego
strikes and other work actions.
The primary goal of the PLA is to save the owner of a
project significant amounts of money by dramatically
reducing the risk of delay and cost overruns due to labor
disputes. The reduction in risk also results in lower financing
and insurance costs for the project — driving even more
savings to the owner’s bottom line.
A Project Labor Agreement is an elegant device that
delivers benefits to all parties involved.
Monsa Nitoto
Taskforce Co-Chair., Coalition for
West Oakland Revitalization
To come into a situation where labor
and the community had a strategic
relationship, and then to come to
the Port and build a partnership is
something unique for us and it’s a
new beginning.
Tailored to meet
the needs of your
The video was produced by Debra Chaplan,
in association with Firestar Productions.
Jay Chance, Editor
Credit Roll
This booklet was written by Bill Rickman,
with editorial assistance from Debra Chaplan.
Design by Barbara Nishi.
© 2000
State Building and Construction Trades Council of California
921 11th Street, Suite 400 • Sacramento, CA 95814
916-443-3302 • www.sbctc.org
Robert Balgenorth, President
Richard Zampa, Secretary Treasurer