Understanding Project Labor Agreements: What Virginia Transportation Leaders Need to Know

In the aftermath of SB 182 (2020), which removed the statewide prohibition on government-mandated Project Labor Agreements (PLAs), a growing number of Virginia jurisdictions have imposed, or have considered imposing, these requirements on public construction. Therefore, it’s critical for highway contractors, engineers, and aggregate producers to understand the implications and risks of PLAs. VTCA provided its members a webinar by Virginians4Fairness on why PLAs matter, the risks they pose, and the steps being taken to ensure fair, competitive bidding in the Commonwealth. 

What Is a PLA? 

A Project Labor Agreement is a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project. While they are promoted as a way of ensuring project stability and labor peace, in practice, PLAs often introduce rigid constraints that can undermine a contractor’s ability to manage their workforce effectively and financial risk in the form of withdrawal liability from union pension plans. 

PLAs typically: 

• Limit the use of a contractor’s existing workforce (often to just five “core” employees).   
  For non-union contractors, a reliable and skilled workforce is one of their greatest assets. These workers are often long-term employees who have been trained internally and understand the company’s culture, safety protocols, and efficiency standards. Mandated PLAs typically restrict non-union contractors to using just five “core” employees, requiring the remainder of the workforce to be supplied by union hiring halls. This presents several concerns: 
  • Disrupts established teams, reducing productivity and increasing risk. 
  • Forces non-union workers to either join a union or lose work. 
  • Reduces flexibility and continuity in staffing, making it harder for non-union firms to manage performance, quality, and deadlines. 

• Require hiring through union halls based on seniority. 
  Mandated PLAs often include provisions requiring that all additional labor be hired through union halls, where selection is typically made based on seniority within the union, not merit or suitability for the specific job. For non-union contractors, this is troubling because: 
  • It removes control over who is hired, a serious concern on complex, safety-sensitive projects. 
  • It prevents merit-based selection, limiting a contractor’s ability to hire the best person for the job. 
  • Workers from the contractor’s local area may be passed over for out-of-area and sometimes out-of-state workers with more union seniority. 

This system conflicts with the way most non-union contractors recruit and manage their teams—based on experience, performance, and compatibility with company standards. 

• Mandate adherence to union rules and benefit plans. 
  Under a mandated PLA, all contractors must follow union work rules contained in the union’s Collective Bargaining Agreement (CBA) and contribute to union benefit plans, even for existing employees who are not union members. This creates major complications for non-union firms: 
  • They must pay into union pension and benefit plans from which their employees may never receive a benefit, because those workers aren’t vested or may not stay in the union. 
  • Contractors are also often required to continue paying into their own benefit plans, meaning they pay twice—a cost burden union contractors do not face. 
  • Union work rules can limit scheduling flexibility and impose inefficient practices that contradict a non-union contractor’s operating model. 

Ultimately, these provisions increase costs and reduce the competitiveness of non-union bidders. 

• Grant union representatives’ access to the job site and personnel information. 
  Many PLAs grant union representatives the right to enter job sites at-will and access non-union workers’ personal information—such as names, addresses, and work assignments. 
  For non-union contractors and their employees, this is highly invasive: 
  • It compromises worker privacy and can lead to unwanted solicitation or pressure to unionize. 
  • Union access can disrupt the job site and complicate management, especially when union reps are not part of the contractor’s chain of command. 
  • It can strain morale if employees feel monitored or harassed. 

Many non-union workers choose their employment specifically because they prefer to work outside the union structure. Mandated union access can be seen as an infringement on those rights. 

It’s important to note that PLAs vary from project to project and may contain different terms that are not immediately evident unless fully reviewed before signing. 

Why Are PLAs Being Mandated? 

The rise of PLAs in Virginia stems largely from political motivations. Some policymakers promote PLAs to secure support from organized labor or to project a pro-worker image.  Progressive office holders seek additional campaign cash and a steady flow of “volunteer” workers in primary and general elections and Unions are more than happy to supply both. However, these agreements are often justified with claims—such as improving safety, quality, or workforce availability—that research has shown to be questionable. 

While Virginia Transportation Construction Alliance (VTCA) is not opposed to union labor—indeed, many VTCA members operate successfully under union contracts—the Alliance advocates for choice. Contractors should be free to determine whether union or open-shop labor best serves their business and project needs, without a government mandate tipping the scales. 

Risks Contractors Must Consider 

Before agreeing to a PLA, contractors should fully understand the potential liabilities: 

• Double Payment of Benefits: Employers may have to contribute to union trust funds while continuing to fund their own benefit programs, putting them at a financial disadvantage. 
• Pension Withdrawal Liability: Contractors participating in multi-employer pension plans under a PLA risk significant financial exposure if they withdraw from the plan—liabilities that can amount to hundreds of thousands of dollars. 
• Restricted Flexibility: Union Collective Bargaining Agreements (CBAs) may include provisions that affect project schedules, change orders, and the ability to avoid liquidated damages. 

The Cost of PLAs 

Research from the RAND Corporation underscores the impact of PLAs on project cost and efficiency. In Los Angeles, for example, affordable housing projects operating under PLAs cost 21% more and took 27% longer to complete than comparable non-PLA projects. 
Even leaders from traditionally union-friendly states—such as California Governor Gavin Newsom and DC Mayor Muriel Bowser—have pushed back against mandated PLAs due to their financial implications and reduced flexibility. 

Recent Activity in Virginia 

PLAs have gained traction in various localities: 

• Loudoun County, Alexandria, Fairfax County, and Prince William County have all considered or approved PLAs for pilot projects. 
• The Coalition created and distributed commercials in Loudon County during last fall's election.  The commercial was to point out the negative outcomes of mandated PLA’s and identify who benefits most from a mandated PLA.  Local elected officials did not appreciate being called out.   
• As a result of airing the ad, local elected officials, while not halting mandated PLAs are now searching for ways to better understand the impacts of a mandated PLA (paying more per project and getting less taxpayer investment and losing local jobs to those who live out of state etc.) and find a compromise. 
• In some instances, like Arlington County, the coalition’s opposition has resulted in the removal of PLA requirements from a project solicitation.  Be warned that Arlington County is determined to implement a mandated PLA in the community. 

At the federal level, President Biden’s executive order requires PLAs on federal construction projects over $35 million, though certain agencies like the Department of Defense and GSA have opted out of using PLAs on select projects due to legal challenges and cost concerns. Just this week, a federal judge issued an injunction against the DOD’s plan to opt out of mandated PLAs. 

The VTCA Perspective 

VTCA supports fair competition and a transparent procurement process. Mandated PLAs, especially when not warranted by the scope or complexity of a project, can unfairly exclude capable contractors, limit competition, and increase taxpayer costs. At the same time, VTCA recognizes and respects its members who work under union contracts. The issue is not unions, but government-imposed mandates that remove choice and prohibit a competitive environment.   

How You Can Help 

Virginians4Fairness is leading the charge to inform policymakers and the public about the real-world impacts of PLAs. Here’s how VTCA members can support this effort: 

• Stay informed about local and state PLA developments. 
• Engage with elected officials to express concerns about mandated PLAs. 
• Support the campaign through financial contributions or by sharing information with your network. 

For more resources or to get involved, visit Virginians4Fairness.org.