Traverse City Record-Eagle


September 7, 2013

Court lifts injunction on key state labor law

DETROIT (AP) — A federal appeals court struck down an injunction Friday, clearing the way for a Michigan law that likely will diminish the role of unions in public construction projects.

The court, in a 2-1 decision, said there’s nothing illegal about a 2012 law that bars schools and local governments from signing onto strict labor agreements with a construction contractor, deals known as PLAs, or project labor agreements.

Gov. Rick Snyder and Republicans who control the Legislature say the agreements can add at least 12 percent to the cost of a project. But labor groups sued, claiming the Michigan law violates federal law.

“The state is seeking to preserve taxpayer resources by encouraging open competition among potential contractors and subcontractors. ... The law’s effect is limited to forbidding governmental units from entering into PLAs and then forcing the terms and conditions found within on bidders, contractors and subcontractors,” the 6th U.S. Circuit Court of Appeals said.

The decision throws out an injunction ordered by U.S. District Judge Victoria Roberts. Judges John Rogers and Eugene Siler Jr. noted that contractors still can enter into labor agreements with subcontractors, just not local governments that select the winning bid.

In a dissent, Judge Karen Nelson Moore agreed with Roberts that the right to negotiate a labor agreement on a public construction contract is protected under federal law and decisions by the U.S. Supreme Court.

The Michigan law “is not a neutral action based in efficiency. It is an attempt to affect labor policy,” Moore wrote.

The law doesn’t apply to private construction projects in Michigan.

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