Mandatory Project Labor Agreements (“PLAs”) Are Coming To Federal Construction Contracting

I dreamed I saw Joe Hill last night,
alive as you and me.
Says I “But Joe, you’re ten years dead”
“I never died” says he,
“I never died” says he.

--By Alfred Hayes

Back on February 9, 2022, the Biden Administration published a new Executive Order (“EO”) 14063 on use of Project Labor Agreements (“PLAs”) on Federal construction projects. See 87 Fed. Reg. 7363 et seq. The new EO is intended to supersede the voluntary Obama-era PLA rules with new rules that make PLAs mandatory for large scale federal construction projects which are defined as project equal or exceeding $35,000,000. No longer would agency officials have discretion to ignore the PLA provisions. And the PLA provisions would apply to Indefinite Quantity Indefinite Delivery (“IDIQ”) and Architect-Engineering (“A-E”) contracts as well.

I last covered PLAs for my now out-of-print book entitled The Federal Contractor’s Guide to Employment Law Compliance (Thompson Pub. 2016) where I analyzed the subject under the Obama-era regulations:

A PLA 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. PLAs are expressly authorized by the National Labor Relations Act under the conditions specified in that law (29 U.S.C. 158(f)). The U.S. Supreme Court has recognized the right of public entities, when they act as purchasers, to insist that they will do business only with contractors that enter into PLAs (Building and Constr. Trades Council v. Associated Builders, 507 U.S. 218, 231 (1993)). Nevertheless, federal agencies have at times been prohibited from requiring PLAs in federally funded construction projects …, a prohibition that was upheld in Building and Const. Trades Dept., AFL-CIO v. Albaugh (295 F.3d 28 (D.C. Cir. 2003)).

The argument for requiring PLAs, according to E.O. 13502, is that construction projects typically involve multiple employers at a single location, meaning that employees of different contractors working side-by-side might be subject to different terms and conditions. That situation may create friction and disputes that have the potential to delay the project. According to E.O. 13502, using PLAs will prevent some of these problems by standardizing working conditions within large-scale construction projects.

The new Biden Administration proposed regulations were issued on August 19, 2022. See 85 Fed. Reg. 51044. The comment period ended October 18,2022. Presumably, final regulations will be issued in 2023 and the mandatory PLA requirement will go into effect. With the clout exercised by organized labor in the Biden Labor Department, no other result is conceivable. The regulations don’t specify what must be contained in the PLA. But it has to be bargained out with a labor organization and thus the PLA will look like a master collective bargaining agreement applying to all nonexempt workers engaged on the project, whether prime or subcontractor employees.

While the EO allows for the contracting agency to make exceptions to the PLA requirement, the circumstances allowing for an exception are very limited.  They involve factors  such as a short duration project, only one craft or trade at work on the site, specialized construction work with a limited number of contractors, urgent and compelling  need for the project, and/or government market research suggesting the PLA will impede competition. Otherwise, when these regulations are finalized, PLAs will become mandatory for large US Government construction procurements.

If you are a prime contractor engaged in large construction contracts for the US Government, whether union or nonunion, you will be well advised to get prepared for the new mandatory PLA era which is coming soon.