Commonwealth Court Opinion Cancels PennDOT’s Union Friendly Project Labor Agreement

The Pennsylvania Department of Transportation recently had an effort to implement a Project Labor Agreement (PLA) in connection to the Markley Street Project in Norristown shot down by the Commonwealth Court (read the full opinion here).

The background of the case provides the following details:

For some time, PennDOT has been making improvements to Markley Street, which is State Route 202 in Montgomery County (Markley Street Project). A nonunion contractor, J.D. Eckman, Inc., won the bid for the first phase of the Markley Street Project and completed it a year ahead of schedule and on budget.

In August 2017, PennDOT issued a bid solicitation for the second phase of the Markley Street Project. The solicitation provided that all contractors were required to sign a PLA with the Building and Construction Council of Philadelphia and Vicinity (Building and Construction Council), which represents 11 local unions identified in the PLA (Local Unions).

The PLA obligated bidding contractors to hire craft labor personnel through the Local Unions and to be bound by the Local Unions’ collective bargaining agreements. In response, multiple contractors, both union and nonunion, filed taxpayer lawsuits, bid protests, and petitions for preliminary injunction. PennDOT
withdrew its August bid solicitation.

On December 20, 2017, PennDOT issued another bid solicitation,
which also required contractors to sign a PLA with the Building and Construction Council. The PLA again obligated contractors to hire through the Local Unions in accordance with the terms of their collective bargaining agreements. The December
bid solicitation differed from the August bid solicitation in one key respect: the PLA provides that if the successful bidder already has a collective bargaining agreement with United Steelworkers, that bidder was not subject to the hiring requirements under the PLA and permitted to use its United Steelworkers workforce.

To emphasize what was stated in the first paragraph. The first phase was completed by non-union labor “a year ahead of schedule and on budget.”

After the successful first phase, Secretary of Transportation Leslie Richards, who previously served as a Supervisor in Whitemarsh and a Montco County Commissioner, decided to change the rules to make the bidding process favor unions according to the opinion.

The opinion by President Judge Mary Hannah Leavitt states:

We hold, therefore, that the PLA requirement in the bid solicitation for the Markley Street Project violates competitive bidding. Given this conclusion, we need not consider whether PennDOT acted in good faith in revising the PLA after it
withdrew the August 2017 bid solicitation. This is because courts will not authorize a bid with “a clear potential to become a means of favoritism, regardless of the fact that the … officials may have acted in good faith in the particular case.” PennDOT’s good faith, or lack thereof, is irrelevant because the PLA places United Steelworkers contractors in a favored position.

Please note that in the above-quoted text we removed the footnotes and citations. You can see the complete text here.

In the conclusion of the opinion, the court cancels the bid process that involved the PLA. The Pennsylvania Department of Transporation has the opportunity to appeal this opinion to the Supreme Court of Pennsylvania.

It will be interesting to see if this opinion by the Commonwealth Court gives the Colonial School Board and Plymouth Township’s Council pause and they reconsider the “Responsible Contractors” policy/ordinance that each adopted in 2018. The lawsuits over the “Responsible Contractors” policy/ordinance make a similar argument in regards to making the bidding process less competitive.

Secretary Richard’s husband, Ira Richards, is the campaign chair for Felix Raimondo (D) and Leslie Finegold (D), the up-for-election Colonial School Board members. It was under Raimondo and Finegold’s leadership, they serve as president and vice-president of the board, that the Colonial School Board passed the “Responsible Contractors” policy.

There has also been talk of the Montgomery County Commissioners implementing a PLA in connection with the courthouse renovations in Norristown. Will that now be abandoned?

More to come.