A Project Labor Agreement (PLA) is a prehire, collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.
PLAs allow the employer and unions to negotiate on terms of employment, including pay, benefits, hours, leave, and safety policies. Employers are able to resolve issues at the bargaining level rather than through conflict, which ensures labor peace and reduces employee turnover by promoting open communication and job security.
Government and private businesses, most notably Honda of America, have utilized PLAs to build everything from industrial and manufacturing facilities to hospitals, stadiums and high rises to highways, city halls and safety centers. These agreements benefit working men and women, contractors, project owners, communities and taxpayers by ensuring projects are completed on time and on or under budget. PLAs also require employee safety training.
Academic research has shown that PLAs are good for both public and private-sector construction projects, particularly larger projects. The validity of PLAs has consistently been upheld in both federal and state courts. PLAs do not adversely affect the costs of construction projects; rather, they positively influence project timeliness, quality, safety, training, minority employment, employee benefits and labor peace.