A Possible Update to the Project Labor Agreement Executive Order? President Biden Reviews the Functionality of Mandatory Project Labor Agreements in Long-Term Construction Contracts.

“Now rumor has it she ain’t got your love anymore; Rumor has it” – Adele

Per Bloomberg News, it seems as though the Biden Administration is reviewing an Obama era law that asks and encourages federal agencies to use Project labor Agreements (“PLAs”) in federal construction contracts. Any changes or enhancements would likely come in the form of an executive order. While the executive order will allow the Biden Administration to affect actual change, it may complicate later infrastructure negotiations between Democrats and Republicans.

The current law was introduced by President Obama in 2009 under EO 13502. According to that EO, a Project Labor Agreement is a “pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project”. EO 13502, 2009. These PLA’s are intended to alleviate the inefficiencies that occur in large, long term construction contracts. In such endeavors, there are often several different labor units working on different parts of the project. This occurs because contractors often do not keep a permanent workforce. As a result, if one labor unit stops work because of a payment issue or other labor dispute, the whole project could be delayed.

Large construction projects are inherent in federal infrastructure contracting. As a result, EO 13502 encouraged federal agencies to use these PLA’s to remove some of the inherent risks of large, long term construction projects. The PLA would bind all of the contractors and their subcontractors, prohibit strikes, and set procedures for resolving future labor disputes. Opposition for the EO came from a large portion of construction employers and employees. The Bureau of Labor statistics estimated in 2020 that only 13.1 percent of full-time workers are actually part of a union. This means that if an agency decided to mandate a PLA into the contract, it would exclude an extremely large section of the workforce.

While some may say this is discriminatory, the government would argue that it allows them to more efficiently provide for labor over the course of the construction project. Therefore, it is no different than rejecting bids from a contractor that consistently has staffing issues. Whether or not this is an apt analogy is up for debate. But, at the end of the day, President Obama’s Executive Order was voluntary for the executive agency. This report from Bloomberg, based on an anonymous source, suggests that President Biden would make the practice mandatory for federal agencies which would increase the availability of federal contracts to union employed businesses and decrease the availability for non-union businesses.

While President Obama stated that cost and reliability were the policy objectives behind the EO, excluding so many non-union employees and employers suggests that such an EO may be used to encourage union membership. While subtle, there is a difference between the National labor Relations Act, which makes prohibits employers from chilling union involvement, and purposely excluding non-union businesses from all large construction contracts. Additionally, the federal agencies likely would not want to include these clauses in their contract because it would affect their bottom line and. Agencies have faced several legal challenges in their attempts to mandate bidders to include a PLA in their solicitations. These challenges have largely been successful in eliminating the PLA’s from the solicitation. This leads me to believe that we won’t be seeing any mandatory language in an update to the Obama era Executive Order.

To view the Bloomberg report on this development, please visit their website here: https://news.bloomberglaw.com/daily-labor-report/punching-in-white-house-mulling-order-on-contract-labor-pacts.