Anti-Project Labor Agreement Statute Upheld

Kegler Brown Construction Newsletter

Ohio's "Open Contracting Act" became law on July 13, 1999. O.R.C. Chapter 4116. The Act was designed to restrict Project Labor Agreements (PLAs) where employees of contractors and subcontractors working on the project would have become members or pay dues to a union.

Labor challenged the Act and argued that it was pre-empted by the National Labor Relations Act ("NLRA") and therefore unconstitutional under the Supremacy Clause of the U.S. Constitution. The trial court in Cleveland agreed and enjoined the enforcement of the Act.

The Court of Appeals for Cuyahoga County recently ruled that the Act was not pre-empted and was constitutional in that it did not prohibit PLAs outright but merely prevented public owners from entering into PLAs with objectionable terms (such as mandatory union membership).

The dissent argued that this was a distinction without a difference in that a PLA to be effective must require contractor compliance with the terms entered into between the union and public owner (such as mandatory union membership).

This case may well find itself into the Ohio Supreme Court, but in the interim, PLAs will have to be very narrowly drafted or will be ineffectual.