The Ohio House Commerce and Labor Committee took testimony April 13 on HB 102 which would prohibit state agencies from requiring or prohibiting certain labor requirements as a condition of performing public works and prohibit appropriations of state funds for public works when political subdivisions require labor requirements.
Rep. Young introduced a substitute bill, which was accepted 7-5 along party lines.
Fred Horner testified as a proponent of HB102 because he believed that project labor agreements (PLAs) drive up
costs and limit competition. He shared his experiences of dealing with a “significant amount” of state and federally
funded projects, as well as private entities. “In these economic times when many are facing financial crisis, why would we force PLAs and limit the bidding
process for state or federally funded projects,” Horner asked. “PLAs add 20 percent to the project which is a direct
cost to the taxpayers of the state, and exclude bidders because of how his or her shop is organized.”
Rep. Szollosi asked if the 20 percent Horner spoke of applied to both private and public projects. Horner replied
that the 20 percent was a modest number, and said it varied depending on paying benefits like health and pension.
Szollosi remained skeptical, and asked why major corporations still used PLAs to reduce costs, if it increases costs
by 20 percent. Horner said that he was just there to testify about PLAs and his experience.
Young said that people have told him that this bill is the end for unions in Ohio, and asked Horner if he agreed that
there is a place for unions in Ohio. “I absolutely agree that unions compete very well, and I lose jobs to them every
Rep. Ramos asked if Horner had any concerns about smaller companies undercutting him, or his having to
undercut himself, when bidding on a job if this legislation was passed. Horner replied that he was not, because
smaller companies, and less-reputable companies have to pay liability insurance and bond the job, which they can’t
N. Victor Goodman, representing the Ohio State Building and Construction Trades Council, spoke in opposition to
the bill saying that it was “unwise public policy” and because it certainly “runs afoul” of the supremacy clause in the
U.S. Constitution. Goodman cited a multitude of Supreme Court cases, as well as construction law sections, that
helped emphasize the point that HB102 was unconstitutional.
“HB102 would rob state and many local officials of a tool used frequently and successfully by non-public purchasers
of construction services on their most complex construction projects,” Goodman remarked.
“The very introduction of this bill demonstrates the sponsor’s intent to set state policy, i.e. regulate it. The bill, therefore, crosses the market participation line and imposes an unconstitutional regulatory ban of PLAs.”
Goodman attached a letter with his testimony from the president of Toyota, Tetsuo Agata, praising the work done
by America’s Building Trades Unions, and stating that due to the PLAs they used on their major construction
projects, they could not be more pleased with the results. “Why prevent public entities from having a PLA on a major project if they think it will work better for them,” Goodman asked. “Why abolish that choice?”
Szollosi asked Goodman if he agreed with the 20 percent cost increase that private companies incurred as a result
of PLAs, to which Goodman responded that since 22 percent of any project is labor, the workers are either working
for free or paying to work. “With all due respect to the previous witness, we have numbers from Uncle Sam.”
Mike Staggs, superintendent of New Boston Schools, gave proponent testimony and told the story of his dealing
with PLAs and how his district was involved in the 2010 Ohio School Facilities Commission (OSFC) scandal and the
inspector general’s report. Ground broke on their project, but it was put on hold by OSFC for no reason, other than the fact that they had not
agreed to a PLA.
Szollosi asked about letters from the superintendents of Ironton and South Point local schools, which thanked local
trade organizations for partnering with their schools and commending the quality of work done after entering into
PLAs. Staggs responded, “I know that Dean Nance and Ken Cook would not write those letters now. I know Dean Cook
After Staggs’ testimony, Young took an opportunity to say that this legislation did not prohibit or require PLAs.
Finishing the evening’s testimony was Nick Nykulak of the Cleveland law firm Ross, Brittain and Schonberg who
came forward as a proponent of the bill, but started by saying that he had just gotten an email on his phone
regarding Nevada SB1403 which “effectively does the exact thing that Ohio’s HB102 is doing.”
He continued, “We, along with the organizations and employers we represent strongly support the passage of
HB102 and believe that this bill will uphold the purpose of Ohio’s competitive bidding laws, will expand employment
opportunities and job creation in the state, and will prevent favoritism, collusion and discrimination in government
He also added that the firm believes the bill to be constitutional and that it will survive any pre-emption challenge.
“Although the Ohio Supreme Court decision preempted a previous version of this bill, here it is absolutely clear that
this bill does not attempt in any way to regulate the labor relations of any private party. If anything, this bill clearly
expresses a view of labor neutrality on behalf of the state and its political subdivisions when acting as a market
participant and engaged in contracting.”