Associated Builders and Contractors (ABC) of New Jersey applauded a federal court decision issued Sept. 12 that could end up prohibiting Jersey City, N.J., from mandating the use of union-only project labor agreements (PLAs) on certain tax-abated construction projects. ABC has long maintained that PLAs reduce competition and drive up the cost of development.

"The court’s decision puts us one step closer to securing an opportunity for all contractors—including merit shop contractors—to participate in the vibrant Jersey City redevelopment effort,” said Russ McEwan, shareholder at Littler Mendelson, ABC’s counsel on the case. “We look forward to addressing the preemption issue before the district court.” 

“ABC seeks a level playing field for all contractors to bid and win work,” said Dominick Mondi, president of ABC-New Jersey Chapter. “We applaud the ruling that the city did not have a proprietary interest in tax-abated projects. This opens the door for these projects to possibly be bid by a wider array of qualified contractors. This will increase competition and ultimately provide greater value to both the developers and the end users, which is to say the current and future residents of Jersey City.”

Jersey City passed a city ordinance designed to entice private developers to invest in the city by offering tax abatements for private developers if they agreed to require contractors to enter into a PLA to perform work on a project. The court ruled specifically that Jersey City was a regulator rather than a true-market participant and remanded back to the district court final decision on whether the ordinance at issue was preempted by federal law or otherwise unconstitutional.