Supreme Court Upholds Executive Order on PLAs

Wed February 19, 2003 - National Edition
Tracy Carbasho

The U.S. Supreme Court has upheld President Bush’s executive order to ban union-only Project Labor Agreements (PLAs) on federally-funded construction projects.

“The Supreme Court’s decision is a major victory for U.S. taxpayers and for the construction industry,’’ said Eddie Rispone, national chairman of the Associated Builders and Contractors (ABC). “President Bush’s common-sense executive order helps to ensure open competition in the U.S. construction industry. Not only do the union-only PLAs discriminate against the four out of five construction workers who choose not to join a labor union, they also create a costly burden on taxpayers.’’

Executive Order 13202 states that prohibiting PLAs is necessary in order to guarantee open competition on federally funded projects, maintain neutrality toward government contractors’ labor relations, reduce construction costs to taxpayers, expand job opportunities for small and disadvantaged businesses, and prevent discrimination against contractors and their employees based upon labor affiliation or lack thereof.

The National Right to Work Legal Defense Foundation Inc. in Springfield, VA, has described PLAs as “schemes which require that all contractors, whether they are unionized or not, subject themselves and their employees to unionization to work on government-funded construction projects.’’

“The Supreme Court’s decision is a step toward protecting workers and taxpayers from higher costs and other abuses that flow from compulsory unionism,’’ said Stefan Gleason, vice president of the National Right to Work Foundation. “PLAs are nothing more than a shakedown — union officials use them to demand taxpayer handouts and government-granted special privileges in exchange for not ordering strikes or causing other disruptions. It is wrong for the federal government to support a scheme that bilks taxpayers out of millions of dollars and deprives employees of their basic right to choose whether or not to affiliate with a union.’’

Despite the applause that erupted throughout the construction industry when the Supreme Court’s decision was announced, the AFL-CIO Building and Construction Trades Department (BCTD) criticized the ruling. The executive order was issued on Feb. 17, 2001, and the BCTD filed suit two months later in an attempt to prevent the Bush administration from enforcing its ban during the reconstruction of the Woodrow Wilson Bridge near Washington, D.C.

The BCTD had already negotiated a PLA for much of the work on the Maryland portion of the span, which carries traffic from Interstate 95 and the 495 Capital Beltway over the Potomac River near Maryland and Virginia. BCTD President Edward Sullivan said the executive order is “a direct attack on all building trades members.’’

Bush later amended the ban to exempt any project where at least one contract had been awarded with a PLA as of the date the order went into effect. ABC officials are disappointed that more than $2.7 billion in federal funds could be spent completing projects started under a PLA.

In response to the suit filed by the BCTD, a federal judge in the District of Columbia ruled in favor of the AFL-CIO in August 2001 by issuing a preliminary injunction to block Bush’s ban on PLAs. At the time, Judge Emmet Sullivan said the executive order “unquestionably conflicts’’ with the National Labor Relations Act.

However, the U.S. Department of Justice appealed the judge’s decision in November 2001. The ABC, the U.S. Chamber of Commerce, the National Right to Work Legal Defense Foundation, Independent Roofing Contractors Association, Coalition for Fair Employment in Construction, Western Electric Contractors Association, the Maryland Chamber of Commerce and other groups joined together in February 2002 to file an amicus brief urging the appellate court to overturn the district judge’s opinion.

The Court of Appeals for the District of Columbia Circuit sided with ABC in July 2002 by overturning Judge Sullivan’s ruling and upholding the executive order. Even though the AFL-CIO’s BCTD challenged the appellate decision, the Supreme Court’s recent announcement is now the final word in the battle over PLAs.

“I am, of course, very disappointed that the court has refused to examine whether the president acted within his authority in restricting the ability of federal agencies, states and local governments, and other recipients of federal assistance to use project-wide agreements on their construction projects,’’ said Edward Sullivan. “We will be evaluating alternative strategies for enabling these entities, their construction managers and our Building and Construction Trades Department to continue to reap the benefits of project labor agreements on major public works projects that receive federal funds.’’

The BCTD officials noted that PLAs have been used for more than 50 years on hundreds of high-profile projects in both the private and public sectors. The Supreme Court affirmed the use of PLAs on public projects in a case involving the cleanup of Boston Harbor in 1993, according to the BCTD.

Officials with the AFL-CIO contend the president’s executive order violates federal laws that protect workers’ rights and represents misuse of presidential power to restrict the use of federal funds allocated by Congress.

The AFL-CIO believes the executive order: :

• Bars PLAs on all federally-funded projects, even in situations where they have been regularly used since the 1940s.

• Allows service contractors in federal buildings to lay off low-wage workers, who are mostly women, whenever there is a turnover of government contractors.

• Requires government contractors to post notices concerning workers’ rights within their unions to object to dues and agency fee payments, while posting nothing about their fundamental labor rights to organize or join unions.

• Abolishes labor-management cooperation systems that serve the federal government and hundreds of thousands of federal workers, and result in productivity gains and cost-saving measures that benefit taxpayers.

On the other hand, ABC Communications Director Scott Brown pointed out that union-only agreements are responsible for inflating the cost of construction projects, limiting competition and mandating the use of outdated and inefficient union work rules and job-site practices that lower productivity and drive up costs.

“Everyone benefits from free-market competition because firms are considered based on their ability to complete the work on time and on budget in a safe, professional manner,’’ said Brown. “Union-only projects are simply a way for politicians to garner favor with organized labor and more states should follow the example of Ohio and ban union-only PLAs.’’

Brown said he further believes that groups that oppose the executive order want to be able to persuade political entities to reserve taxpayer-funded work exclusively for themselves.