I. Legal Background on Project Labor Agreements
A. The National Labor Relations Act and Project Labor Agreements
Under Section 8 of the National Labor Relations Act (NLRA or the Act), an employer may not negotiate a collective bargaining agreement (CBA) with a union if the union is not supported by a majority of employees. Under the Act, these “pre-hire agreements” are seen as illegally assisting a union prior to demonstrating majority status, and an employer that enters into such an agreement may commit an unfair labor practice under section 8(a)(1).
The Act, however, creates an exception to this general rule for employers in the construction industry. Given the shorter periods of construction employment and that it often would be “impracticable to complete the process of certifying a collective bargaining representative before a project ends and the employees are laid off,” Congress amended the NLRA in 1959 to include section 8(f) which legitimizes pre-hire agreements within the construction industry. Specifically, section 8(f) has been interpreted as stating that an employment contract between an employer and a union in the construction industry is not an unfair labor practice “merely because union majority among the employer’s employees has not yet been attained.” Therefore, section 8(f) allows for construction industry employers to sign onto existing trade CBAs for a specific project regardless of majority status or enter into project-specific pre-hire agreements referred to as PLAs.
A PLA is an umbrella “pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.” Essentially, PLAs guarantee that the developer of a construction project will utilize union contractors (or contractors who become signatories to a union CBA for the project) to complete its project and will do so in accordance with the terms and conditions agreed to by both parties.
A PLA typically contains provisions related to wages, benefits, worksite conditions, the timeline and duration of the project, labor harmony (e.g., “No Strike No Lockout” provisions), and expedited dispute resolution procedures. However, while a PLA shares similarities to a traditional CBA, a PLA is unique in that it only lasts for the lifetime of the project that it governs. Once the project is complete, the terms of the PLA cease, and the construction industry employer, the union, and the employees are not required to abide by its provisions.
B. The Pros and Cons of a PLA
PLAs can bring many benefits to a construction project. For example, PLAs allow for developers to source and utilize a sufficient number of highly trained unionized workers in specific construction trades and bring years of experience to a project. Additionally, PLAs can allow for these qualified workers to be secured at predictable, agreed upon costs. Similarly, PLAs can often avoid delays by committing union workers to a specific timeline for the project and ensuring that a project will be completed on time. PLAs can also assist with bringing diversity to a construction project by including provisions requiring contractors to participate in recruitment, apprenticeship, and training programs for women, minorities, veterans, and other underrepresented groups. Moreover, these agreements address, and expeditiously resolve, jurisdictional disputes without any loss of production and also provide for expedited binding dispute resolution procedures, ensuring labor harmony. Finally, PLAs can often improve worker safety by requiring contractors to comply with the Occupational Safety and Health Administration’s (OSHA) regulations and additional project safety rules.
However, entering into a PLA has also proven to produce unfavorable results on certain construction projects. As explained more in the following, despite producing predictable costs, a PLA may ultimately drive up the cost of labor on a project due to the fact that union contractors often have well-above-average wage scales. Additionally, if non-union bidders get word that a project may be utilizing unionized workers via a PLA, the agreement may have the effect of attracting fewer bidders, keeping costs high.
II. Use of PLAs in the United States Today
The utilization of PLAs within the United States construction industry has mirrored nationwide declining unionization trends and suffered from heated policy oscillations. For instance, while employers and developers were once willing to generally negotiate “open shop” wages, benefits, and other additional terms and conditions of employment for unionized workers, economic concerns and the rise of qualified non-union—or “open shop”—alternative construction firms, particularly within the last few decades, have turned both employers and developers towards the utilization of these potentially cost-saving “open shop” alternatives.
A. Union Dominance in the United States
In the 1970s, approximately 30% of all private sector workers in the United States were members of a union. During this time, many unions were able to secure labor force density in their individualized markets and enhance job security for their members. In doing so, unions could negotiate higher wage and benefit packages and gain additional terms and conditions of employment that non-unionized workers were unable to achieve.
However, a significant decline in nationwide union membership evolved between the 1980s and 1990s. While higher wages and generous benefits were advantageous for unionized workers, evolving global, national, and local economic and social forces permitted some employers to push back and “move to a lower-cost employment model in which they could avoid providing security and social welfare to their employees.” As a result of these efforts, by 1980, nationwide private-sector union membership declined to 20%, and, by 1990, only 11.9% of private-sector workers were unionized. This decline persisted into the early 2000s where only 9% of private-sector workers remained unionized. During the Great Recession of 2008, where employers clung onto any beneficial economic strategy, nationwide private-sector union membership dropped to 7.6%, and, today, private-sector union membership hovers at 6%.
B. Union Density in the United States Construction Industry
The construction industry was no exception when it came to the precipitous nationwide decline in union membership. In 1970, a strong 42% of private-sector construction workers in the United States were unionized. This large percentage created leverage for construction unions to negotiate higher wages and benefits. Similarly, in the 1970s, PLAs dominated the construction industry, and many developers negotiated PLAs to secure their benefits.
However, in parallel to the nationwide decline in private-sector unionization, private-sector construction similarly saw a staggering drop. Private-sector union membership in the construction industry declined to approximately 30% by 1980 and continued to erode to 21% by 1990. By the 2008 Great Recession, only 15.6% of the private-sector construction industry in the United States was unionized. It should be no surprise that the use of PLAs also dropped during these decades, as negotiating a PLA meant accepting higher wages and benefits in contrast to the expanding open shop market. Today, only 13.6% of the private-sector construction industry is unionized.
C. PLAs: A Topic of Political Discussion
As nationwide union rates fell within the construction industry and PLAs became less favored, the United States government jumped in. As a result, PLAs soon became a topic of fiery political debate. While Democrats advocated for the use of PLAs on federally funded projects, Republican administrations opposed. Most recently, on February 4, 2022, President Biden signed Executive Order 14603, which requires contractors and sub-contractors on federally funded projects over $35 million to be a party to a PLA. President Biden’s order is expected to affect an estimated $262 billion in federal construction and approximately 200,000 workers.
III. Project Labor Agreements Within New York City
The effect of these nationwide market trends on the prevalence of PLAs was echoed in the New York City construction industry. In the 1970s and 1980s, when unions dominated the construction industry, PLAs served as the main mechanism by which developers secured workers for their projects in New York City. Through a PLA, New York City developers were able to secure a sufficient number of trained union workers at a predictable cost and minimize delays and disruptions to their projects. During this time, PLAs took the shape of a traditional collective bargaining agreement whereby parties involved in a construction project came to the bargaining table ready and willing to negotiate an agreement that covered the scope of the specific project. However, as the price of union wages and benefits rose and as non-union, less costly, viable construction alternatives became available, New York City developers and construction industry employers started to reconsider the utilization of unionized labor in an effort to economize.
A. The Key Players Within New York City Construction
Two of the largest umbrella organizations in New York City construction are the Real Estate Board of New York (REBNY) and the Building and Construction Trades Council (BCTC).
As New York City’s leading real estate trade association representing approximately 15,000 commercial, residential, and institutional property owners, builders, managers, investors, brokers, and other individuals professionally interested in New York City real estate, REBNY is involved in virtually all stages of the real estate, development, and construction industry. For its members, REBNY conducts research on public matters, such as tax policy, city planning, and other city, state, and federal legislation and regularly publishes market data, reports, and surveys. REBNY also represents the New York City construction industry in government affairs.
On the other side of the industry sits BCTC, which is an umbrella organization that consists of fifteen national and international unions representing approximately 100,000 men and women in New York City. On behalf of its members, BCTC advocates for workers’ rights, economic security, and middle-class employment opportunities.
B. The History of REBNY and BCTC
Together, the members of REBNY and BCTC have played a part in some of the largest property developments within New York City, and, from the 1980s to the early 2000s, REBNY members generally chose to utilize BCTC members and their construction contributions when selecting bids for their projects. In doing so, a large percentage of New York’s private construction was completed by union workers, and developers remained committed to securing union workers through the use of PLAs. For example, in the 1970s and 1980s, unions dominated 85% of the New York City market for all construction (both public and private) and continued to maintain 40% of the market for private sector construction specifically.
However, parallel to the national trends in the unionized construction workforce, BCTC members’ market share started to decline. While developers realized the benefits of working with a unionized workforce, such as the training, education and efficiency of union members, financial difficulties brought on by the Great Recession in 2008 quickly forced developers to focus on cost-saving strategies. Despite a 63% decline in new construction within New York City from 2008 to 2010, the cost of union labor continued to be higher in New York City than any other competitor city, such as Boston, Chicago, or San Francisco. Additionally, during this time, “open shop” construction firms were approximately 20–30% less expensive than union shops due to union wages, benefits, and work rules. Recognizing the high price of union labor, Mayor Michael Bloomberg outlined a budget for 2010 that urged unions to decrease their costs by paying a larger share of health insurance premiums and agreeing to wage reductions. As the hardships of the Great Recession persisted, some developers could no longer justify the high price of BCTC unionized labor as the “open shop” market presented new, cost-saving opportunities for the industry. By 2009, unions only maintained 60% of the market for all construction (both public and private) and only 28% of the market for private sector construction within New York City—a 12% drop from two decades earlier.
C. The Economic Recovery PLA of 2009
Realizing the need to claw back market share and stimulate construction activity for union workers, BCTC members, along with the contractor trade group the Building Trades Employers’ Association (BTEA), proposed a solution known as the “Economic Recovery PLA” in 2009 for private-sector construction within New York City. The Economic Recovery PLA was intended to create an industry standard template PLA for private-sector unionized construction that provided developers with economic relief due to the Great Recession. In essence, it was an agreement that unions and developers could utilize when negotiating their specific PLAs. The PLA featured a set of core provisions that were common to most PLAs, such as wages, benefits, and no strike/no lockout provisions, as well as a host of union concessions, including temporary wage freezes, reduced staffing requirements, and other cost-saving methods for developers. BCTC members predicted that the Economic Recovery PLA would result in a savings of “16-21 percent” for developers and believed that this agreement could catapult both union membership and union market share forward.
Despite its innovation as an industry standard template PLA, the Economic Recovery PLA of 2009 ultimately failed to live up to expectations. Not only were the cost-saving mechanisms built within the PLA insufficient—or unrealized—reductions, but unions also took issue with the standardized nature of the PLA as they wanted to reserve “the option to develop project-specific PLAs with individual owners or developers.” As a result, BCTC members decided not to pursue a further extension of the Economic Recovery PLA in 2011.
D. The Hudson Yards PLA and Statement of Principles: A New Framework
On the heels of the Economic Recovery PLA, a new opportunity emerged for BCTC’s construction unions. In the early 2000s, undeveloped land on the west side of Manhattan became the focal point of new construction development. Initially, New York City submitted a bid to host the 2012 Olympics and planned to use the undeveloped land as the site for the Olympic stadium. However, the city’s Olympic bid was ultimately rejected, and the city placed the Metropolitan Transportation Authority (MTA) in charge of selecting a bid from a local developer to transform the property. Ultimately, the MTA selected the Related Companies (Related) to develop what is known today as Hudson Yards.
The development of Hudson Yards called for a large number of construction workers, and, knowing that it needed skilled workers to complete its project, Related turned to BCTC to explore a possible PLA. However, with the failure of the Economic Recovery PLA in the rearview mirror and the rise of a viable non-union construction alternative in New York City, both Related and BCTC understood a new type of PLA would be needed. BCTC and Related spent two years negotiating a project-specific, modern PLA (the “Hudson Yards PLA”) that functioned as the new industry standard for developers, construction industry employers, and unions engaged in similar projects. The Hudson Yards PLA included across the board discounts, as well as material, productivity-improving changes to work rules. The Hudson Yards PLA demonstrated that effective cost-saving strategies could be achieved through the utilization of unionized workers.
While the Hudson Yards PLA generally achieved its goals in building Hudson Yards, BCTC members and Related ultimately found themselves on opposing sides as Hudson Yards construction was winding up in 2018. Essentially, Related claimed that it was being taken advantage of by BCTC member unions and workers, while BCTC claimed that Related was engaging in anti-union tactics. Additionally, BCTC members took issue with the fact that the Hudson Yards PLA only applied to certain aspects of the larger Hudson Yards Project and Related could theoretically bid the other future sections of the project open shop. While the details and merits of the dispute are immaterial here, the solution achieved by both parties paved the way for a new type of industry framework PLA alternative in New York City construction.
Related and BCTC were able to resolve their differences by way of a “Statement of Principles” (“the Hudson Yards Statement of Principles”). The Hudson Yards Statement of Principles restated the broad goals behind the Hudson Yards PLA and created a framework for productive labor relations between BCTC and Related going forward. Specifically, the Hudson Yards Statement of Principles set out principles that both Related and BCTC agreed to follow regarding the bidding process for other aspects of the Hudson Yards project and enforced commitments by both parties to “facilitate modern efficiencies, good wages and benefits, safe working conditions and an opportunity to individual and collective advancement.” Notably, the Hudson Yards Statement of Principles was not a PLA and did not purport to be a PLA. It was simply an understanding by the parties of how best to operate and negotiate the terms necessary for future work at the Hudson Yards project.
E. BCTC and REBNY: New York’s Governor Mandates Negotiation
Despite success at Hudson Yards, BCTC members still struggled to reestablish their market dominance. In 2015, union members only maintained 21% of the market for private-sector construction in the New York metropolitan area—an almost 20% drop from its 1970s’ and 1980s’ density. With a successful affordable housing tax abatement program coming to its scheduled expiration, another industry turning point arose.
The 421-a tax abatement program provided a tax abatement for developers who design residential buildings with a certain amount of designated affordable housing. However, the program was set to expire in 2015, and one of the open items was whether the prevailing wage should apply for construction workers on 421-a eligible projects. BCTC members advocated for applying the prevailing wage to all 421-a eligible projects. However, REBNY members opposed this concept—as, by this point, non-union, open shop prices, including labor, were significantly less. To resolve this disagreement, Governor Andrew Cuomo required REBNY, on behalf of developers, and BCTC, on behalf of the trades, to negotiate the terms of the construction wage requirements on 421-a programs in order for the tax abatement to continue.
Ultimately, REBNY and BCTC successfully negotiated a creative, market-based solution for construction wages in late 2016. The deal provided for developers to receive the tax abatement for a longer period while also establishing a viable, yet fair, pay scale for union workers that allowed them to remain competitive on projects. Most importantly, this successful legislative negotiation set the groundwork for REBNY and BCTC to expand their relationship and continue to find areas of common ground.
F. Achieving “Détente”
Despite the successful settlements that resulted from BCTC’s disputes with both Related and REBNY, union workers still found themselves losing market share in New York City’s construction market by 2019. It had become apparent—painfully to some—that New York City had become an open shop construction market where construction union density slipped to only 20% of private-sector construction jobs.
BCTC members realized that, to maintain and expand their decreased market share, they had to find a way to work with developers and successfully deliver cost-saving strategies while still maintaining their labor standards. Additionally, despite their resistance to PLAs and the costs associated with the union market generally, REBNY developers and members understood the benefits of working with unionized construction firms and hoped to find a way to utilize their labor via more financially competitive means.
Based on their success negotiating New York’s 421-a extension and building on the Related-BCTC Statement of Principles, REBNY and BCTC saw an opportunity to collaborate in an effort to influence the New York City construction market. Through constructive dialogue, REBNY and BCTC realized that they shared a number of common goals, such as maintaining the long-term health of the city’s economy and promoting middle-class construction jobs. Yet, both parties understood that devising a solution would require creativity. Neither REBNY nor BCTC wished to implement an industry standard template PLA (such as the failed 2009 Economic Recovery PLA) but understood that the current standard of allowing for individualized project bidding created widespread resistance to PLAs and often disadvantaged union contractors, leading to further decreasing union market share. They realized that a viable template that could accomplish both the shared and individualized goals of the parties could be based on the Hudson Yards Statement of Principles.
Thus, REBNY and BCTC agreed that creating a joint understanding of the bidding process among their respective members could be a sustainable way to improve union competitiveness in the market while also giving developers the freedom and independence gained in the “open shop” market without signing a PLA. As a result, in 2019, BCTC and REBNY negotiated their own PLA-alternative known today as the industry-changing REBNY-BCTC Statement of Principles (Statement of Principles).
IV. The REBNY-BCTC Statement of Principles
The REBNY-BCTC Statement of Principles has created a pathway to utilize unionized labor without forcing developers and construction industry employers to commit to PLAs. Essentially, the REBNY-BCTC Statement of Principles is a framework that allows for constructive, economic conversations between the trades and the developers of a construction project. With REBNY and BCTC functioning as the facilitators of the framework, the agreement provides union contractors with access to information about upcoming projects so that they can submit quality and competitive bids for covered projects, while also creating space for developers to make their own independent business decisions when selecting bids for that project. Moreover, the Statement of Principles creates a forum that allows REBNY and BCTC to collaborate on ideas to influence the New York City construction industry and broader economy.
A. The REBNY-BCTC Statement of Principles Bidding Process
Under the REBNY-BCTC Statement of Principles, developers of covered projects voluntarily enter into the following three step bidding process: (i) first, developers complete a REBNY-BCTC information sheet; (ii) second, developers evaluate the bids in accordance with the REBNY-BCTC Statement of Principles; and (iii) once developers accept a bid, they then complete the REBNY-BCTC post-award sheet.
1. Covered Projects Under the REBNY-BCTC Statement of Principles
Together, REBNY and BCTC limited the applicability of their Statement of Principles to certain larger projects within New York City, referred to as “Covered Projects.” These projects generally are those deemed by the parties to be where union labor standards could be the most competitive. If a construction project meets the REBNY-BCTC enumerated criteria, the project will be governed by the REBNY-BCTC Statement of Principles and follow the agreement’s bidding practices. Covered Projects under the REBNY-BCTC Statement of Principles are those that (i) are considered new residential or commercial construction; (ii) are larger than 300,000 square feet; (iii) are located in Manhattan South of 96th Street, Queens Community Board 1 or 2, or Brooklyn Community Board 1 or 2; and (iv) have not solicited bids before September 1, 2020. However, even if a construction project in New York City does not meet the enumerated criteria, a developer may nevertheless choose to participate in the process and may discuss whether to abide by the Statement of Principles with both REBNY and BCTC.
2. Preparing to Bid: Information Sheets
For both REBNY and BCTC to keep track of the projects governed by the Statement of Principles, developers of a Covered Project fill out a REBNY-BCTC Information Sheet. These information sheets state the location of the project, the developer overseeing the project, the nature of the project, and the anticipated start and end dates for the project. Additionally, the information sheets require developers to list the expected trades that they will need to utilize in completing the project and the estimated hours for each trade involved.
While these information sheets provide REBNY and BCTC with a headcount regarding the number of Covered Projects currently utilizing the Statement of Principles, the information sheets also serve a larger purpose within the REBNY-BCTC framework. As will be discussed more fully below, these sheets serve as an original data point that REBNY and BCTC can use when analyzing the percentage of union workers selected for Covered Projects.
3. Evaluating and Selecting Bids
Once a developer submits an information sheet for its Covered Project, the REBNY-BCTC Statement of Principles bidding process commences. As mentioned previously, the REBNY-BCTC Statement of Principles was intended to thoughtfully increase union presence on construction projects in New York City. In fact, within the Statement of Principles itself, REBNY specifically acknowledges on behalf of its members that there can be value added by utilizing union construction workers on Covered Projects principally due to the investment in training and safety undertaken by labor unions.
Yet, notwithstanding the above, REBNY and BCTC hoped to find a way to utilize union labor without weakening developer independence when evaluating bids. The Statement of Principles was created with antitrust considerations in mind, and this level of developer freedom was an important factor when considering how to implement the Statement of Principles. The parties developed an evaluation process capable of meeting the legal parameters and the needs of both sides of the industry.
A key component to the Statement of Principles is that both union and non-union contractors have the opportunity to submit bids for Covered Projects. In other words, although a Covered Project may be governed by an agreement that was created with union consideration, it does not mean that a developer’s only option in selecting workers for its Covered Project is to select bids from unionized contractors. Moreover, developers have the ability to select any combination of bids from contractors—both union and non-union—that they believe are the best fit for their project. As a result, developers maintain significant flexibility when selecting bids for a Covered Project despite being covered by the Statement of Principles.
To give unions an opportunity to compete against bids from the open shop market, REBNY and BCTC agreed to create transparency within their bidding processes so that all bidders understand the playing field. Within the Statement of Principles, REBNY and BCTC outline a multifactor criterion that developers are to reference when evaluating bids from both union and non-union contractors. The list includes seventeen different factors that are important to a construction project, such as safety, diversity, quality, performance, professionalism, productivity, efficiency, insurance and others. While the Statement of Principles instructs developers to evaluate bids pursuant to their “business judgment” and select a bid that makes the most sense for their covered project, this bidding criteria provides union contractors with an understanding of the bidding process and allows them to remain competitive on a Covered Project.
4. Post-Award Sheets
After a developer selects a bid pursuant to the Statement of Principles processes, the developer fills out a REBNY-BCTC Post-Award Sheet. Similar to the initial Information Sheets, the Post-Award Sheets help REBNY and BCTC keep track of which bids were ultimately selected for a project by asking developers (a) the number of union and non-union bidders, (b) whether the contract was awarded to a union or non-union firm, and (c) an estimate of the number of jobs on the project. These Post-Award Sheets provide another data point for REBNY and BCTC to reference when evaluating the success of the Statement of Principles.
5. Ensuring the Effectiveness of the Statement of Principles
In an effort to monitor whether the Statement of Principles is effectuating its stated goals, REBNY and BCTC partnered with Cornell University’s School of Industrial Labor Relations (Cornell ILR) to conduct periodic reports analyzing the amount of union workers selected for Covered Projects. Using the data collected from the Information Sheets and Post-Award Sheets, REBNY and BCTC have asked a Cornell ILR professor to examine (i) the total number of Covered Projects governed by the Statement of Principles within the relevant time period, and (ii) the number of union and non-union contractors selected for each project.
REBNY and BCTC hoped that including this comprehensive analysis would allow unions to see how many projects they did or did not receive based on previous bids and, going forward, adjust their labor costs and competitiveness by engaging in different strategies. For example, a union that lost a significant number of bids within the relevant period could renegotiate its CBA with its construction industry employer to develop a “blended crew” consisting of fully trained journeymen working alongside other workers performing less skilled tasks, as opposed to the traditional model of utilizing only journeymen. This design could effectively lower costs while still maintaining high productivity. Similarly, unions could, among other techniques, try to provide additional discounts on costs, manage the cost of union benefit funds more effectively to mitigate increases, enhance apprenticeship training and productivity, maximize apprentice ratios, or provide developers with flexibility in work rules—all in order to be more competitive with non-union contractors.
Therefore, not only do unions have a better understanding of the bidding process via the Statement of Principles, but the agreement also provides unions and their contractors with the chance to adjust their bidding tactics based on previous wins or losses in an effort to place them in a better position on their next bid. Importantly, both objectives are achieved without (i) limiting developer flexibility, (ii) forcing developers to select a bid from union contractors, or (iii) executing a PLA.
B. The Joint Industry Advancement Committee
During this process, the parties realized they shared many objectives for the City’s construction industry and broader economy beyond the bidding process. The Statement of Principles presented an opportunity to create a forum dedicated to achieving these goals and continuing the productive collaboration of these two umbrella organizations. As a result, REBNY and BCTC used the Statement of Principles to develop what is known as the Joint Industry Advancement Committee (JIAC).
The JIAC is a collaborative body composed of equal members from BCTC and REBNY that meets on a quarterly basis to discuss productive ways to increase the development of New York City and benefit the city’s economy. Additionally, the JIAC has the ability to take on additional projects of mutual interest to both parties, such as legislative or regulatory issues at the local, state, or national level. The Statement of Principles also created two focused sub-committees under the JIAC: (1) a Legislative Sub-Committee; and (2) a Development Sub-Committee.
The legislative sub-committee convenes to further the political and legislative objectives of both BCTC and REBNY. This sub-committee discusses policy issues that are of mutual interest to the parties in order to further shared political initiatives. Under the Statement of Principles, BCTC and REBNY must disclose the contents of any regulation or legislation to the legislative sub-committee before either party can propose it to any governmental body so that the sub-committee can review it and ensure that the mission is aligned with the Statement of Principles. The legislative sub-committee allows for the REBNY-BCTC partnership to extend beyond a specific covered project and impact the broader New York City economy in a positive and productive way.
However, the development sub-committee is a forum that focuses on policies that impact the overall development, employment, standards of living, and diversity in New York City. Additionally, the sub-committee defines projects on which union contractors will have an opportunity to bid. It is charged with the responsibility of ensuring that bids are solicited from both union and non-union contractors and that developers are able to utilize framework principles, while remaining free to choose bids pursuant to their business judgment. Ultimately, the development sub-committee safeguards the Statement of Principles and ensures that all requirements are in place to ensure success of the agreement.
Through the branches of the JIAC, REBNY and BCTC can maintain the viability of the bidding process articulated in the Statement of Principles, while simultaneously contributing to the success of New York City’s construction industry and economy.
C. Using the REBNY-BCTC Statement of Principles as a PLA Alternative
The REBNY-BCTC Statement of Principles has proven to be a viable modern alternative to the PLA model. As nationwide construction unions continue to lose market share, construction unions, as well as developers and construction industry employers, will need to start finding ways to harmonize their needs in order to ensure their mutual success. The REBNY-BCTC Statement of Principles provides an exemplar for productive dialogue that the United States construction industry can utilize and experiment with to meet their needs.
The REBNY-BCTC Statement of Principles functions as a trade-by-trade, job-by-job structure that provides developers with the desired flexibility of not signing a PLA and allows them to select bids from union or non-union contractors for a project. Although the agreement outlines a multifactor criterion for developers to consider, the Statement of Principles is not an agreement between BCTC (or its members), REBNY (or its members), and any individual developer. It is solely an agreement between BCTC and REBNY to memorialize their commitment to the development of New York City—no developers or construction industry employers signed onto the agreement.
However, the REBNY-BCTC Statement of Principles also gives union contractors a fair chance to be competitive in the bidding process and, it is hoped, allow for more union utilization on covered projects. Through its transparent bidding process and multifactor criterion, the Statement of Principles gives union contractors a leg to stand on when going up against bidders in the open shop market. Moreover, the agreement’s comprehensive reporting mechanisms provide unions and their contractors with the opportunity to review their wage and benefit rates and work rules, and adjust them on bids both won and lost.
Conclusion
The balanced structure of the REBNY-BCTC Statement of Principles demonstrates that there is room for both sides of the construction industry—both in and out of New York City—to accomplish their goals outside of the historic structures that have existed for decades. In other words, it provides a way for developers to utilize union contractors and their workers at a fair price and on reasonable terms without being forced into a PLA for an entire project. It ensures that bidding does not just become a “race to the bottom,” eroding hard fought union labor standards that have propelled many into the middle class. Likewise, unions can increase their market share, and developers can select highly skilled union workers (along with non-union workers if they so choose) under economically feasible terms. The REBNY-BCTC Statement of Principles establishes a forum that allows for constructive, economic conversations between the trades and the developers of a construction project, without the use of a PLA, and has ultimately helped to harmonize the needs of both parties in the ever-evolving New York City construction industry.
