By: Mark Leavy and Marc Furman

On November 29, 2011, Mayor Michael A. Nutter signed Executive Order No. 15-11: “Public Works Project Labor Agreements”. The Order strongly recommends – but does not strictly require – the use of project labor agreements (PLAs) on public building projects.

Under the Executive Order, a project is “appropriate” for a PLA if it includes any of “the following characteristics”: a) high construction costs, b) multiple crafts or trades, c) “complex labor requirements” that “conflict with existing collective bargaining agreements”, d) completion without delay, and e) the project furthers “urgent City goals.”

All City Agencies are to issue a “Project Review” to the Mayor’s office regarding these “criteria” on building projects with estimated construction costs of $5 million or more. However, the Executive Order declares that projects with lower costs may also be “appropriate” for PLAs and “encourages” City Agencies to review those projects, too.

The Executive Order “does not require” the use of a PLA on any particular Project. However, it does grant the Mayor’s office the authority to “determine that a [PLA] is appropriate” and enter into negotiations with labor organizations “in consultation with the City Agency”.

Such PLAs must have: a) “guarantees” against strikes or lockouts, b) “binding procedures” for jurisdictional disputes between unions, and c) “diversity goals” for labor organizations and contractors. The Mayor’s Office can also require a third-party “Monitor” on the project to review the opportunities provided for “qualified City Residents, minorities, and women.”

This Executive Order has been the subject of both praise and scorn. Either way, both union and non-union contractors alike that are vying for work on public projects must be aware of this development and understand the implication of entering into a PLA.

If you have any questions or would like more information about the Executive Order and its potential impact, please contact Marc Furman or Mark J. Leavy at 215.564.1700 or at mfurman@cohenseglias.com or mleavy@cohenseglias.com.

Marc Furman is the chair and Mark Leavy is an associate in the Labor & Employment Group of Cohen Seglias Pallas Greenhall & Furman PC.