Alabama Adopts PLA Reform

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On March 3, 2014, Alabama Governor Robert Bentley signed into law House Bill 195, the “Fair and Open Competition in Governmental Construction Act.” Under the Act, public agencies awarding any contract for the construction, repair, remodeling, or demolition of a public improvement, or obligating funds pursuant to such a contract, are prohibited from requiring contractors to sign a Project Labor Agreement (“PLA”), or any other agreement with a labor union, as a condition of performing work on taxpayer-funded construction projects. The Act seeks to ensure fair and open competition on public works construction projects by both union and non-union contractors alike.

PLAs are entered into prior to the commencement of construction and bring in labor unions to bargain for the wages, benefits, and terms of employment. The terms agreed upon then apply to all contractors and subcontractors working on the project. Generally, PLAs require employees to be referred from unions, and any nonunion employees must pay union dues until the project is complete.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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