Project Labor Agreements and Contracting in California

California’s Public Contract Code includes provisions related to project labor agreements, as set forth in Chapter 2.8 of Part 1 of Division 2. Section 2500 authorizes a public entity to use, enter into, or require contractors to enter into, a project labor agreement for a construction project only if the agreement includes all of the following taxpayer protection provisions:

• The agreement prohibits discrimination based on race, national origin, religion, sex, sexual orientation, political affiliation, or membership in a labor organization in hiring and dispatching workers for the project.

• The agreement permits all qualified contractors and subcontractors to bid for and be awarded work on the project without regard to whether they are otherwise parties to collective bargaining agreements.

• The agreement contains an agreed-upon protocol concerning drug testing for workers who will be employed on the project.

• The agreement contains guarantees against work stoppages, strikes, lockouts, and similar disruptions of the project.

• The agreement provides that disputes arising from the agreement are to be resolved by a neutral arbitrator.

Section 2501 authorizes the members of the governing board of a local public entity to choose by majority vote whether to use, enter into, or require contractors to enter into a project labor agreement that includes all of the taxpayer protection provisions for a specific project or projects awarded by that entity and whether to allocate funding to a specific project covered by an agreement.

Section 2502 provides that, if a charter provision, initiative, or ordinance of a charter city prohibits the governing board’s consideration of a project labor agreement that includes all of the taxpayer protection provisions for a project to be awarded by the city, or prohibits the governing board from considering whether to allocate funds to a city-funded project covered by an agreement, then state funding or financial assistance cannot be used to support that project.

Section 2503 provides that, if a charter provision, initiative, or ordinance of a charter city prohibits, limits, or constrains in any way the governing board’s authority or discretion to adopt, require, or utilize a project labor agreement that includes all of the taxpayer protection provisions for some or all of the construction projects to be awarded by the city, then state funding or financial assistance cannot be used to support any construction projects awarded by the city.