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Lawmaker: Project labor agreements unfairly benefit unions

Banning agreements could cost Arizona billions

A Republican lawmaker wants to prohibit Arizona from accepting federal funds for construction projects requiring a preference for union labor, but a union leader says the measure would prohibit a practice that doesn't exist.

"What this bill is about in a nutshell is that everybody should be treated fairly under the law," said Rep. Michelle Ugenti, R-Scottsdale, the bill's author.

Ugenti said HB 2644 addresses public projects that require contractors to have project labor agreements, which are used most commonly to establish hours, benefits and other compensation details and establish mechanisms for resolving labor disputes in order to prevent work stoppages on large construction projects.

A 2009 executive order by President Barack Obama encouraged federal agencies to consider requiring project labor agreements for large construction projects, saying that such projects often involve multiple contractors and noting that one contractor's labor dispute can delay an entire project. However, the order says all contractors and subcontractors should be able to compete for work without regard to whether they have collective bargaining agreements with workers.

The bill, which passed the House and was headed to the Senate floor, wouldn't specifically prohibit the use of project labor agreements, but it would prohibit taking funds for projects that require governments to prefer union labor. Ugenti said the agreements give union labor an unfair advantage.

"You need everyone to participate in the bidding process so you can get the best bid for the best price," she said.

Israel Torres, a lobbyist and consultant for the Arizona State Building and Construction Trades Council, said Ugenti's bill is a solution without a problem because the use of project labor agreements doesn't give union contractors an advantage in the bidding process.

"Non-union contractors and union contractors can both bid on a job. That's the misleading part that people like to talk about," Torres said. "Everyone bids on the job under the same terms and conditions."

Torres said he doesn't think there have been any public projects in Arizona that have involved project labor agreements, though he said they often are used for private projects. He also noted that Arizona is a right-to-work state, meaning workers can't be required to join unions.

However, Ugenti said she believes there have been public projects in Arizona that involved project labor agreements, though she said she couldn't list any offhand. She called the bill largely preemptive to make sure that Arizona's right-to-work status isn't compromised.

"The unions may oppose it, but to be honest, if they feel they can give a better product at a better price I am all for them competing in the bidding process," she said. "You just can't give them an unfair advantage."

Gary Aller, director of Arizona State University's Alliance for Construction Excellence, said that projects requiring project labor agreements don't formally prefer unions but often end up being a de-facto union preference. Project labor agreements often require health benefits, pensions and training programs for workers, Aller said, things that union contractors already have in place but that would be very expensive and difficult for non-union contractors to set up in a project labor agreement.

"That's why when you say project labor agreement it's almost in the same breath saying it's a union job," he said.

Aller said such a law likely would cost Arizona billions in federal funding.

"We are way down in tax revenues, and we have no construction work paying that tax," he said. "This would be another big hurt."

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Ashley Shaney/Cronkite News Service

Rep. Michelle Ugenti, R-Scottsdale, says that HB 2644, which would prohibit the state from accepting federal funds for construction projects requiring a preference for union labor, will prevent unions from having an unfair advantage in bidding for state construction projects.

Project labor agreements

  • Created for projects on a case-by-case basis.
  • Made between project holder and labor groups or contractors that have been awarded a project and labor groups.
  • Can be made before any employees are hired for the project.
  • Utilize collective bargaining.
  • Define terms and conditions including: pay, schedule and work hours; grievance resolution; guarantees against strikes; objectives for hiring local labor, women and minorities.