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Beyond the Rhetoric

Harry C. Alford & Kay DeBow | 2/6/2020, 9:37 a.m.

Gov. Ralph Northam

P.O. Box 1475

Richmond, Va. 23218

RE: Virginia Policy on Government-Mandated Project Labor Agreements and Prevailing Wage on Public Works Construction Projects

Dear Gov. Northam, Senate Majority Leader Saslaw and Speaker Filler-Corn:

The National Black Chamber of Commerce is the largest Black organization addressing African-American economic issues and policies throughout the world. We were incorporated May 23, 1993 and will celebrate our 28th anniversary this July.

It has come to our attention that the Virginia General Assembly is moving legislation to change or rescind section § 2.2-4321.2 of the Code of Virginia,(1) which currently requires taxpayer-funded public works construction contracts procured by state agencies(2) to use a competitive bidding process that is open to all qualified businesses, regardless of whether they are willing to sign union agreements as a condition of performing taxpayer-funded construction projects.

We are concerned that rescinding this statute and replacing it with policies permitting government mandated project labor agreements, which are union agreements unique to the construction industry, on public works projects procured by the Commonwealth’s state(3) and/or local(4) governments will have a negative impact on Virginia’s taxpayers and African-American businesses and construction employees.

Government-mandated PLAs typically require companies to agree to recognize unions as the representatives of their employees on that job, use the union hiring hall to obtain most or all workers, obtain apprentices exclusively from union apprenticeship programs, follow union work rules and pay into union benefit and multi-employer pension plans that any nonunion employees permitted on the project will be unlikely to access unless they join a union and vest in these plans. This forces employers

1 https://law.lis.virginia.gov/vacode/2.2-4321.2/ 2 From statute: "State agency" means any authority, board, department, instrumentality, institution, agency, or other unit of state government. "State agency" shall not include any county, city, or town. 3 See Sen. Saslaw’s SB 182; http://lis.virginia.gov/cgi-bin/legp604.exe?201+sum+SB182 4 See bills introduced by Del. Carroll Foy (HB 122); Del. Tran (HB 1202); and Del. Lopez (HB 358). A NBCC-opposed bill introduced by Sen. Ebbin (SB 839) permits local governments to require developers to enter into agreements with unions like PLAs as a condition of receiving zoning approval for certain private projects. This will drastically reshape Virginia’s ability to attract large employers and developers needed to advance economic development of nonunion workers to pay “double benefits” into existing plans and union plans, and places firms opposed to these costly provisions at a significant competitive disadvantage.(5)

Government-mandated PLAs harm the few, if any, nonunion construction workers allowed to work on a PLA jobsite. Research has found that employees of nonunion contractors who are forced to perform under government-mandated PLAs and contribute into union benefits plans suffer a reduction in their take-home pay that is conservatively estimated at 20 percent.(6) In addition, nonunion construction workers are forced to pay union dues and/or join a union if they want to work on the project and receive union benefits earned during the project. This is wage theft, which will harm the families of Virginians working in the construction industry.