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New Jersey Gov. Phil Murphy Signs PLA Mandate Expansion

May 5, 2021

In an unfortunate but expected turn of events, Gov. Phil Murphy has signed into law New Jersey’s most recent anti-merit shop project labor agreement-favoring legislation, S-3414/A-5378, which requires government-mandated project labor agreements to apply to all public construction contracts over $5 million in the state. ABC and the African American Chamber of Commerce of New Jersey spoke out in opposition to the legislation.

This new PLA mandate expands the already-existing policy that applied PLAs to only public vertical construction contracts over $5 million. The bill received overwhelming support in the legislature, passing the Senate 31-4 and the Assembly 60-10-3, and follows almost two decades of attempts by Senate President Stephen Sweeney to push through the expansion of PLA mandates through a variety of legislation. This includes most recently a 2020 effort, S1370/A2607, that Governor Murphy surprisingly vetoed in August.

Notably, this bill goes beyond simply mandating the use of PLAs by including language aimed at benefitting “minority group members, members of disadvantaged communities and women.” However, the inclusion of that language was a political calculation thought to be the key to finally passing the expansion, intended to mislead voters and dampen opposition from minority business groups, which historically stand in staunch opposition to PLAs due to the discriminatory impact they have on largely nonunion minority-owned businesses.

The bill requires any project labor agreement for projects to which this new policy is applicable to contain “all measures and programs to be undertaken to attain the goals…regarding minority group members, members of disadvantaged communities and women, which may include measures giving them priority in referral and placement from the hiring halls of signatory unions, programs to provide on-the-job or off-the-job outreach and training and programs to provide incentives for, or otherwise facilitate, their hiring and employment.”

Unfortunately, this language is only meant to perpetuate the falsehood that PLAs help, not hurt, minority communities and women, and lawmakers were certain this would secure support from those groups. However, that calculation proved incorrect. The African American Chamber of Commerce of New Jersey has repeatedly spoken out against the bill throughout the legislative effort, first in a joint statement with Associated Builders and Contractors of New Jersey in March. In the statement, AACCNJ President and CEO John E. Harmon Sr. decried the then-proposed PLA expansion and pointed out yet again the dangers PLAs pose to these minority communities, which union bosses and their political allies continue to attempt to use while simultaneously disenfranchising them.

Both ABC New Jersey and AACCNJ advocated extensively for Gov. Murphy to veto this policy once again and offered several quality alternative proposals to help minority communities and disadvantaged populations, encourage competition and protect New Jersey taxpayers. Those efforts and ideas fell on deaf ears, as the false promises and campaign dollars of organized labor drowned out common sense and actual voices of those minority communities.

Upon passage, both groups expressed their disappointment. Now following Gov. Murphy’s signature, they have once again come out in fervent opposition to the expansion.

“This ill-conceived PLA legislation directs public project funding to politically-connected union firms at the expense of the more than 80% of New Jersey construction workers who have chosen not to join a union,” said Harmon. “Furthermore, 98% of minority-owned construction-related businesses are nonunion and will realize no benefits from this law. In fact, many have told me that it could double their costs by forcing them to contribute to pension funds, health care projects and union dues of which their workers are not beneficiaries. Moreover, this decision is devastating because there was ample room for compromise and it demonstrates an unwillingness to take a small step that could have had a transformational impact on Black-, Hispanic-, women-, veteran-owned and small businesses in our state. It appears that the fact that Blacks receive only 1% of public contracts is inconsequential to the administration; notwithstanding the 94% percent of their vote to elect this administration. The irony is, the more things change, the more they remain the same in New Jersey. This would have been the perfect time for this administration to demonstrate their support for the national call for equity.”

“This legislation is an example of how government can hurt the people it purports to help, give unfair advantages to favored special interests, and squeeze the middle class,” said Samantha DeAlmeida, president of Associated Builders and Contractors of New Jersey. “Frankly, the governor’s support for this legislation at this time is confusing, considering he conditionally vetoed it in August of last year. The only change to the bill is the newly added diversity language that was nothing but a guise to shepherd this legislation across the finish line. Alternative ideas that would have actually protected and benefited minorities were offered by both [Associated Builders and Contractors of New Jersey] and [the African American Chamber of Commerce of New Jersey] in hopes of finding a fair compromise, but to no avail. Hardworking taxpayers in New Jersey deserve more efficient and effective policies that will encourage all qualified contractors and their skilled workforce to compete for the opportunity to build long-lasting, quality projects at the best price. Respectfully, this law does just the opposite.”

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