Baltimore’s spending board approved a deal imposing union hiring rules and wages for several city contracts Wednesday, despite warnings from a coalition of contractors who argued the agreement is illegal.

The deal, known as a project labor agreement, calls for priority hiring of union labor for four projects by the city’s Department of Public Works. Those projects, which have yet to be bid, are estimated to cost between $128 million and $140 million, collectively.

The deal, which includes rehabilitations to three city pumping stations and an outfall for wastewater at Sparrows Point, requires contractors to abide by union hiring procedures, often based on seniority, and to pay union-mandated wages if higher than the prevailing wage. Contractors and subcontractors must use city residents to fill at least 20% of journey-level work hours and 50% of apprentice work hours.

Mayor Brandon Scott, one of five members of the city spending board, announced plans for the agreement late last year at a news conference flanked by union leaders. The mayor touted the agreement as a win for skilled laborers who live in Baltimore.

On Wednesday, a coalition of nonunion contractors challenged the agreement, arguing it was illegal because it limits competition.

Attorney Robert Fulton Dashiell, representing the Baltimore Coalition for Fair and Open Competition, said nonunion shops would be effectively locked out of the bidding process because they had no way to win.

“There’s a whole universe of contractors that I represent who are ineligible to bid this contract because they don’t want to go through the exercise of bidding and not being awarded the contract,” he said.

Attorney Sean Malone, representing the Maryland Minority Contractors Association, said the agreement lacks a termination mechanism considered standard in most contracts. That offers little protection for the city, he said.

“I hope our brothers in labor can produce what they say and that would be great,” he said. “But if they can’t, you protect the taxpayer.”

City attorneys argued Baltimore is under no obligation to complete any of the four projects included in the agreement. If one is not completed to officials’ satisfaction, the others can be dropped, explained Michael Mullen, an attorney for the city.

“I don’t believe it’s illegal,” Mullen assured the board.

Former Mayor Sheila Dixon, who also represents the Maryland Minority Contractors Association, lobbied the board. The decision will hit minority-owned companies hardest, she said.

“I understand the process and what you’re trying to do, but it’s not going to, Mr. Mayor,” she said. “Minority companies will be eliminated.”

The agreement was broadly supported by the mayor-controlled Board of Estimates — members voted for it unanimously. However, several acknowledged that it was likely to cost the city more money.

Comptroller Bill Henry said he considered the additional cost, the exact extent of which is not yet known, to be money well spent.

“That money is an investment in building a skilled workforce for Baltimore,” he said. “I don’t mind paying more money if Baltimore is getting more out of it.”

Scott said during a post-meeting news conference that he didn’t expect taxpayers to mind, either.

“If a company has a $1.5 million bid on their project, and they’re from Pennsylvania and all their employees live in Pennsylvania versus a city-based business ... I know the residents of Baltimore will say that extra [cost] is worth it because we’re keeping that here, growing and training our own workforce,” he said.

Mike Henderson, president of Associated Builders and Contractors of Greater Baltimore, said after the meeting that city officials should expect more protests over contracts and challenges in court.

“This is not a threat,” he said. “They’ve left these companies with no other recourse.”

The project labor agreement is Scott’s second attempt at mandating union labor in the city’s contracting process.

In 2020, then as City Council president, Scott cosponsored legislation that would have mandated such agreements on all city construction projects valued at $25 million or more, or capital improvements worth at least $15 million. The bill stalled out in the City Council, facing opposition from the same groups who objected Wednesday.