On Nov. 17, Maryland Gov. Wes Moore issued an executive order that requires the consideration of union-favoring project labor agreements on construction contracts procured by state agencies where the state’s financial commitment is $20 million or greater. The EO also includes new community benefit agreements and government-registered apprenticeship policies in addition to troubling pro-PLA language.

ABC stakeholders are concerned this new policy’s pro-PLA language will result in inflated construction costs and reduced competition from more than 90% of Maryland’s construction workforce who choose not to join a union and have successfully built Maryland’s taxpayer-funded construction projects.

The EO was signed at a press conference in Baltimore and was followed by a press release identifying billions of dollars’ worth of Maryland infrastructure projects receiving federal government funding where PLAs will be considered.

On Nov. 13, Gov. Moore stood alongside Biden administration officials and announced his administration’s commitment to “high labor standards” on forthcoming federally assisted construction projects in Maryland:

“In the state of Maryland, we will work with the Biden administration to ensure that federal projects in Baltimore operate under the highest possible labor standards, including the Maryland Department of Transportation’s commitment to labor agreements for a number of strategic projects across the agency portfolio,” said Gov. Moore. “Partnership drives progress and we are going to keep moving in partnership with our friends in the White House, in Congress and with our unions to create good-paying jobs.”

When mandated or given preference on public works projects, PLAs severely restrict opportunities for Maryland’s construction workforce, thus opening the door to out-of-state contractors and employees affiliated with unions taking work from quality large and small Maryland contractors and their experienced construction workforce.

Contractors must negotiate and sign a PLA, which is an agreement with multiple construction trade unions, as a condition of winning a public works contract. Typical PLAs contain provisions that require contractors to hire most or all of their workforce for a project through construction union hiring halls, effectively requiring nonunion companies to forgo their existing Maryland workforce and instead hire unfamiliar workers, the majority of which will be from outside Maryland. Union hiring rules give preference to their members with seniority, regardless of where they are from.

Additionally, every worker, union member or not, is typically required to join a union and/or make contributions to the unions’ training, pension and health care plans, regardless of whether they benefit from the plans or receive duplicative benefits from their current employer. This leads to an estimated wage reduction of 34% for nonunion construction workers. In addition, these requirements effectively prohibit Maryland’s construction firms from competing for these projects, as duplicative benefits costs and union work rules in typical PLAs make them less competitive and also expose firms to future multiemployer pension plan liabilities. 

When then-candidate Moore toured ABC Greater Baltimore’s multicraft training center in 2022, he acknowledged union-only PLAs can harm local workers, explaining, “I am not going to sign anything that is going to send Maryland jobs to Pennsylvania and New Jersey.

In addition, the EO fails to take into consideration the impact PLAs have on construction costs. Numerous academic studies have compared the impact of affordable housing and school projects built with and without PLA mandates and have found that, on average, government-mandated PLAs increase costs between 12% and 20% compared to projects that are competitively bid through fair and open competition. 
Unsubstantiated claims that PLAs benefit historically disadvantaged communities and businesses are undermined by strong evidence that this is not the case in many marketplaces and Baltimore’s minority contractors have vocally opposed efforts by City of Baltimore lawmakers to require PLAs on local projects.

ABC Maryland chapters have reached out to the Moore administration seeking clarification about many aspects of this executive order and new policy.

Maryland is 1 of 9 states that have enacted legislation or executive orders strongly encouraging or requiring government-mandated PLAs on state construction projects. In contrast, 25 states have passed laws prohibiting government-mandated PLAs on state, state-assisted and local construction projects to some degree.

Stay tuned for additional information and action items that will help fight for fair and open competition for ABC member businesses and Maryland’s construction workforce on taxpayer-funded infrastructure projects.