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Contractors Group Sues MN School Over PLAs

Wednesday, March 20, 2019

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The Minnesota/North Dakota chapter of the Associated Builders and Contractors is suing a Minneapolis school district over what it says are unconstitutional project labor agreements.

That chapter, which represents more than 350 firms and approximately 22,000 employees, claims that because of the PLAs in place, companies potentially miss out on that $66 million a year that the district spends on construction contracts.

What’s Happening

Minnesota ABC, along with Laketown Electric Corporation, filed the suit against Minneapolis Public Schools Special School District No. 1 and Nelson Inz, the chairman of the Minneapolis Board of Education, in federal court on March 12.

Zolnierek / Getty Images

The Minnesota/North Dakota chapter of the Associated Builders and Contractors is suing a Minneapolis school district over what it says are unconstitutional project labor agreements.

The complaint discusses the school district’s requirement that any contractor working on a project must agree to a PLA between the district and a union called the Minneapolis Building and Construction Trade Council.

Within the requirements, the contractors need to hire from union halls and pay into fringe benefits funds. In addition, the contractors need to agree to the terms before they even bid on a project. This process has reportedly been in place with the district since 2004.

According to Courthouse News, one of the plaintiffs’ attorneys, Wen Fa, with Pacific Legal Foundation, said the school district “requires contractors to take workers from union hiring halls at the expense of their own workers.”

“It’s no surprise that these project labor agreements serve as a barrier to entry to qualified contractors that are unwilling to upend their business,” Fa said. “This ultimately hurts not just contractors, but taxpayers who have to pay more as a result of these anticompetitive agreements.”

The plaintiffs are seeking an injunction that prevents the district from enforcing union hiring and the fringe benefits requirements of the PLAs, claiming that they violate First and 14th Amendment rights.

PLAs Elsewhere

The ABC has a long history of standing against PLAs, and 24 states in the country have regulations forbidding their use on public projects.

In 2017, the group applauded then-Wisconsin Gov. Scott Walker, who signed into law the prohibition of PLAs on state, state-assisted or local construction projects.

Proponents of the agreements, on the other hand, say that PLAs bring a level of predictability to costs and construction timelines. They also note that PLA projects typically ensure overtime pay and make managing projects easier with everyone under one contract.

However, around 80 percent of private construction workers in the country have opted out of unions, and though PLAs don’t make it impossible for non-unionized professionals to work on those jobs, they do create a significant hurdle. This has resulted in cost overruns due to lack of competition, which is the biggest point of contention of those who oppose the agreements.


Tagged categories: Associated Builders and Contractors Inc. (ABC); Good Technical Practice; Government contracts; Labor; Lawsuits; NA; North America; Unions

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