Federal Judge Strikes Down Michigan Law That Outlawed Local Project Labor Agreements

DETROIT, March 1, 2012 /PRNewswire/ -- A U.S. District Court judge on Feb. 29 struck down Michigan's "Fair and Open Competition in Governmental Construction Act" (Public Act 98, 2011).

The ruling re-establishes the ability of local units of government in Michigan to enter into project labor agreements (PLAs) on public construction projects. Federal Judge Victoria Roberts ruled that PA 98, signed into law last July by Michigan Gov. Rick Snyder, "impermissibly interferes with the comprehensive regulatory scheme" established by the National Labor Relations Act.

"Before this law was passed we warned the state Legislature that it interfered with federal labor law," said attorney John Canzano, who challenged and argued the case on behalf of the Michigan Building and Construction Trades Council. "PLAs are essentially a form of collective bargaining, and Gov. Snyder and the legislature attempted to limit union rights under federal labor law. The judge issued a well-thought-out ruling, and I think it will stand up on appeal."

The Michigan Building and Construction Trades Council – the umbrella organization for about 100,000 unionized building trades workers in Michigan – and the Genesee, Lapeer, Shiawassee Building and Construction Trades Council challenged the law in federal court in August 2011.

Judge Roberts heard two hours of oral arguments in the case, and took additional briefs. Michigan Attorney General Bill Schuette's office argued the case on behalf of the state.

Project labor agreements are generally sought by property owners (or municipal officials or school boards) and the construction contractors they hire. The agreements with the construction labor force can vary from project to project, but generally establish wage rates, hours, and usually prohibit strikes or lockouts.   The agreements can also include language that spells out standards for safety or skills training for workers, as well as drug and alcohol testing requirements.

They are hardly one-size-fits-all contracts, and they generally allow the hiring of nonunion contractors, even though most require contractors to be signatory to, or adhere to, a collective bargaining agreement for the term of the project.

Even though PLAs have been successfully used for years by school boards, cities, townships and counties around Michigan, Republican lawmakers in Michigan essentially said in PA 99 that from their seats in Lansing, they were in a better position to conduct the business of local units of government.

"We applaud the court's decision," said Michigan Building and Construction Trades Council President Zane Walker. "It's clear that Republican lawmakers saw Public Act 98 as a way to interfere in the workings of local communities. Republicans in Lansing wanted to dictate how municipalities establish their bidding practices and how they should run their community business. The fact is, project labor agreements work. They're a great tool to assure that owners and contractors know their costs going into a project, and have a safe, trained workforce.

"This is a victory for working men and women in this state who choose to make construction a career."

The now-overturned law prohibited local communities from entering into contract terms that "requires, prohibits, encourages, or discourages bidders, contractors, or subcontractors from entering into or adhering to agreements with a collective bargaining organization relating to the construction project or other related construction projects."

"That law has now been struck down and is invalid," Canzano said. "Municipalities are once again free to enter into, or retain, project labor agreements."

SOURCE Michigan Building and Construction Trades Council