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Posted on: August 9, 2020

Governor Vetoes Bill Expanding Project Labor Agreements

On Monday Governor Murphy issued a conditional veto for S-1370, which expands the permissible use of project labor agreements for public works projects from building based public works projects to include highways, bridges, pumping stations, and water and sewage treatment plants. Projects will still need to be at least worth $5 million, excluding land acquisition costs, to be eligible for project labor agreements.

The Governor’s conditional veto removed road and highway projects from the definition of public works and clarified that public works projects include bridge replacement, construction, reconstruction, and rehabilitation.

In the past the League of Municipalities has opposed project labor agreements as they tend to limit competition, the hallmark of the public bidding process in New Jersey, and increase project cost. Project labor agreements typically narrow the number of potential bidders as local units must accept higher bids from a limited pool of union-only contractors. Small contracting firms, the backbone of employment opportunities for many workers, are traditionally non-union. With a project labor agreement in place they are unable to compete not based on their proven ability to do quality work at reasonable prices but on whether or not their workers chose to join a union.

While we appreciate the Governor’s conditional veto and the permissive nature of S-1370 we continue to oppose S-1370 as we do not believe it is good public policy to expand the use of project labor agreements.

Contact: Lori Buckelew, Assistant Executive Director, lbuckelew@njlm.org, 609-695-3481 x112.

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