Hard Hats Play Hardball: Project Labor Agreements and the Quagmire of Union Politics

When city governments forge deals with labor unions, even overwhelmingly liberal cities like San Francisco get a taste of conservative political grudges. Supervisor Mark Farrell’s latest efforts to authorize a Project Labor Agreement (PLA) between construction trade groups and city agencies is no exception.

Project Labor Agreements are essentially a set of standards for contracting public projects, either committing to hire union labor or, in this case, guaranteeing union benefits to nonunion contractors.

While an obvious boon to unions, city governments typically view them as a convenient way to settle labor negotiations before they start. (Unions give up their right to strike in exchange for a PLA.) Because of their inherently political nature, conservative “Right to Work” groups tend to portray PLAs as “kickbacks” for union leaders that stifle competition and drive up costs for taxpayers.

Farrell’s proposal is co-sponsored by Supervisors Malia Cohen, Norman Yee, Jeff Sheehy, London Breed, Ahsha Safai, and Hillary Ronen, with strong support from the San Francisco Labor Council and the Building Trades Council. The bill would guarantee union benefits including prevailing wages and local-hire guarantees to non-union construction workers on city-funded projects with costs exceeding $1 million. It would largely affect the Department of Public Works, as other agencies such as the the San Francisco International Airport, the San Francisco Public Utilities Commission, the Port of San Francisco, and the SFMTA already have such agreements in place.

As political insiders would note, you can’t make an omelet without breaking some eggs—and, to mix idioms here, Farrell is walking on eggshells. His proposal has ruffled feathers both within city hall and among outside interest groups amid widespread rumors of a potential run for mayor in 2019. Although the city is already observant of multiple PLAs, the City Controller’s office advised Supervisor Farrell against such a proposal in a memo last year.

Some construction groups have excoriated Farrell over the bill, urging him to raise the threshold for PLA requirements to projects costing more than $25 million. A letter from the Local Business Enterprise Advisory Committee (LBEAC) quoted a memorandum from the City Controller’s office issued last year, warning that PLAs “have had a ‘chilling effect’ on competition because some nonunion contractors will not bid on PLA-governed projects…”—and to some, this is precisely the point. Sources close to nonunion contractors’ groups, speaking on the condition of anonymity, alleged that Farrell’s proposal was a political move to ingratiate himself to the building trades, at the expense of largely Asian-American contractors.

LBEAC Chair Miguel Galarza intimated as much in his letter, which continues: “this drive to create of a City-wide PLA is duplicitous and wholly unnecessary…the City has never had any construction delays due to work/labor issues in over 30 years.” The City Controller did manage find one anecdote of a labor strike in the past 20 years delaying a project by just one day.

The Controller’s memo went further, arguing that a citywide PLA would undercut current city laws designed to exempt nonunion contractors from PLA labor standards when bidding on projects worth up to $20 million. The political gambit is clear: if Farrell runs for mayor, and if the cynics are correct, he may be counting on this move—lowering the threshold that would require union wages and benefits by $19 million—to deliver votes from building trade groups.

But unlike cynics, politicians can’t burn bridges. Jess Montejano, spokesperson for Supervisor Farrell, contended that his office was still working with the LBEAC to find common ground. “We’re still meeting with them and we’re still keeping an open mind,” Montejano said. He described the negotiation process as a “balancing act between building a sustainable pipeline of high-paying jobs and trying to find a sweet-spot with concerns from [city agencies] and from LBEAC.”

However, Montejano noted that Farrell’s threshold of $1 million was not arbitrary, but rather based on precedent from Project Labor Agreements established by the San Francisco Unified School District (SFUSD).

In a statement, Supervisor Farrell added: “I believe we need to give working people and families a fighting chance to stay in San Francisco. While Trump and his anti-worker allies seek to prohibit project labor agreements across the country, San Francisco must continue to move forward. I always keep an open mind...but I will not support changes that seek to gut the core purpose of our policy.”

In the context of national politics, his position is a compelling one. Republican governors in Missouri and Wisconsin have recently signed legislation banning Project Labor Agreements, citing concerns over higher costs and less competition in the market. In particular, Governor Scott Walker has pursued a virulently anti-union policy platform in order to hamstring the state’s Democratic party, which relies on robust support from labor unions. Governor Walker worked closely with the Associated Builders and Contractors on the bill—a Right-to-Work lobbying group whose Northern California chapter has also advocated against Farrell’s bill.

Michael Theriault, secretary-treasurer of the SF Building Trades Council, released a statement that seemed to deliberately borrow from Republican pro-competition rhetoric typically used to oppose Project Labor Agreements—but this time, to defend the policy: “When wage standards are better enforced, contractors must compete not through underpayment of wages, but through efficiency. Responsible contractors benefit; irresponsible contractors suffer.” Theriault also argued that the PLA could “heal rifts” between minority contractors and politically powerful labor unions.

The bill will likely be discussed by the Board of Supervisors within the month.

This story has been updated to include a statement from Supervisor Mark Farrell.

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Photograph by Leeroy.