A contractor in the construction industry is often called upon to enter into agreements with labor unions. The contractor may enter into the labor agreements for many reasons. Some of the reasons include that the contractor needs skilled employees, that the contractor wants to avoid delays as a result of labor problems, or that the contractor has been required to bargain with a labor union as a result of an election.

A labor union starts the organizing process by contacting a contractor's employees and by informing them that it wants to represent them regarding wages and benefits. The union must obtain the signatures of 30 percent of the employees in order to obtain an election from the National Labor Relations Board. If the union wins the election, the contractor must bargain with the union regarding wages and benefits. Bargaining means that the contractor must enter into a labor agreement with the union. If the union loses the election, it must withdraw from a construction site for one year.

There are generally three types of labor agreements. The first type of labor agreement is a national agreement. The national agreement is often available for large contractors who work on a nationwide basis and who employ a large number of employees. The national agreement usually provides the contractor with an advantage regarding wages. The second type of labor agreement is a local agreement. The local agreement is often available to all contractors in a specific geographic area. The local agreement is often negotiated through local associations or groups. The third type of labor agreement is a project agreement. The project agreement is an agreement for a specific project. The project agreement ends when the specific project is completed.

Labor union agreements usually contain provisions regarding the wages, the fringe benefits, and the working conditions that a contractor is required to provide to his or her employees. The agreements may contain an exclusivity clause, which clause provides that the union shall be the sole supplier of the contractor's skilled employees. The agreements may also contain provisions regarding the contractor's future liability for pension funds, pension plans, and retirement benefits.

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