How Project Labor Agreements and Apprenticeship Mandates Exclude Minority and Women-Owned Contractors

Diversity is one of many imagined benefits touted by proponents of project labor agreements and apprenticeship mandates. It's a cynical claim when you consider the practical impact of those two policies.

PLAs lock out merit shop contractors by requiring use of only union labor rather than their own, talented employees. Apprenticeship requirements hurt contractors, often small businesses, without a state-registered program. Meanwhile, union contractors automatically comply with PLA and apprenticeship requirements by virtue of being a signatory to organized labor.

These policies create insurmountable, systemic barriers for minority- and women-owned construction businesses (MWBEs), often small businesses with limited resources and smaller workforces. Most MWBEs operate as merit shops without union ties and do not host registered apprenticeship programs.

What Are Project Labor Agreements and Apprenticeship Mandates?

PLAs are pre-hire collective bargaining agreements between construction project owners and labor unions. They set terms and conditions for all contractors and subcontractors on a project, including wages, work rules, and dispute resolution. Apprenticeship mandates require contractors to employ a certain number or percentage of apprentices registered with state-approved programs.

These polices require contractors to be union-affiliated or to maintain state-registered apprenticeship programs. This requirement excludes many MWBEs that operate independently of unions and do not have formal apprenticeship programs. These policies are touted as pro-worker and pro-job training, but in fact, serve only to limit competition and favor organized labor, which represents a mere 17.3% of the Massachusetts construction workforce.

The proof that PLAs harm MWBEs is evident on the Holyoke Veterans Home project. The state legislature mandated a PLA. The state's Division of Capital Asset Management and Maintenance demanded the PLA make an exception for MWBEs. Why? Because DCAMM knew it was the only way for MWBEs to work on the project. Despite union resistance, DCAMM won an MWBE carve-out for contracts up to $1 million.

Data Reveals the Extent of Exclusion for MWBEs

Analysis of data from DCAMM and the Division of Apprenticeship Standards shows a clear pattern:

• 87.5% of Minority Business Enterprises (MBEs) certified by DCAMM are nonunion. Out of 48 certified MBEs, 42 do not have union affiliation.

• 72% of Women Business Enterprises (WBEs) certified by DCAMM are nonunion. Out of 97 certified WBEs, 72 operate outside union structures.

• Only 9 out of 145 DCAMM-certified MWBEs have a state-registered apprenticeship program. This means 136 MWBEs are disadvantaged by apprenticeship mandates.

  
  

These numbers demonstrate that the majority of MWBEs are locked out by policies requiring union membership or registered apprenticeship programs.

Why Most MWBEs Are Nonunion and Lack Apprenticeship Programs

Many MWBEs operate as merit shops, meaning they hire workers based on merit rather than union affiliation. This model offers flexibility and cost control, which is essential for smaller firms competing in a challenging market. Establishing and maintaining union relationships and apprenticeship programs can be costly and administratively complex, especially for small businesses.

Additionally, apprenticeship programs require significant investment in training infrastructure, administration, and compliance with state regulations. As small businesses, many MWBEs lack the resources to develop or sustain these programs, especially when they are newly established.

The Impact of PLAs and Apprenticeship Mandates on MWBE Participation

When state construction projects require PLAs and apprenticeship mandates, they effectively exclude most MWBEs and all merit shops from bidding or working on these projects. This exclusion happens because:

• Contractors must employ union workers, which nonunion MWBEs do not.

• Contractors must have registered apprenticeship programs, which most MWBEs lack.

• Nonunion MWBEs face higher costs and administrative burdens to comply.

• As small businesses, MWBEs have smaller workforces. This makes it difficult to employee the number of journeymen needed to meet the arbitrary apprenticeship ratios. For example, five journeymen are needed to employ a single apprentice in many cases.

  
  

This exclusion contradicts the goals of diversity and inclusion policies that aim to increase MWBE participation in public projects.

Policymakers who promote diversity and inclusion often support PLAs and apprenticeship mandates without recognizing their exclusionary effects. This oversight creates a paradox where policies promoted as helping MWBEs instead block their access to opportunities.