Sponsor Statement for HB 209

Pre-Hire Project LaborAgreements

The National Labor Relations Act (NLRA) permits employers in the construction industry to enter into pre-hire Agreements or Project Labor Agreements (PLA’s) to accommodate special conditions in the construction industry such as the short-term nature of employment, unpredictable costs, and a lack of steady supply of skilled labor.

States are excluded from the definition of "employer" in the NLRA, however, in 1993, Building and Construction Trades Council v. Associated Builders and Contractors, (Boston, 113 S.Ct. 1190, 1993), the U.S. Supreme Court ruled that a public entity can choose a contractor based upon that contractor’s willingness to enter into a prehire agreement if the public entity was pursuing proprietary interests to ensure an efficient project.

The Court has determined that the state and its political subdivisions may enter into or require its contractors to enter into a pre-hire project labor agreement. The Court has not provided sufficient guidelines to determine when a municipality may enter into a project labor agreement. The Court ruled only that a municipality may enter into a pre-hire project labor agreement if that municipality is "attempting to ensure an efficient project that would be completed as quickly and effectively as possible at the lowest cost."

HB 209 will provide guidelines whereby the state and its political subdivisions could enter into or require a contractor to enter into a pre-hire project labor agreement. In general it requires that it must be shown that a PLA is in the public’s best interest.

PLA’s typically exclude half of the Alaskan workforce from job opportunities. PLA’s exclude more than half of the truly Alaskan contractors capable of performing the work.

Chugach Electric Association recently dropped its requirements of PLA’s. The result has been a tremendous cost savings to its consumers due to increased competition for the work.