You Can Sleep When You Die: Developments in the ABC Davis-Bacon Act Regulatory Challenge

“To improve is to change; to be perfect is to change often.”

 — Winston Churchill

 I have been musing over the recent developments in the ASSOCIATED BULIDERS AND CONTRACTORS OF SOUTHEAST TEXAS (“ABC”) v. SONDERLING case in the US District Court in Texas. In a joint status report and then Order of the court, some significant Davis-Bacon Act (“DBA”) developments have occurred.  

By background, the ABC sued and challenged many aspects of the 2023 Biden Administration DBA regulatory changes. See https://www.awrcounsel.com/blog/2023/9/11/who-will-be-the-bag-holder-the-tpas-or-the-employers-for-the-admin-fees-dol-recently-disallowed-for-davis-bacon-act-and-maybe-sca-hampw-plans?rq=Davis-Bacon; https://www.awrcounsel.com/blog/2023/12/13/davis-bacon-when-will-federal-contracts-catch-up-with-dols-new-regulations?rq=Davis-Bacon; and https://www.awrcounsel.com/blog/2023/11/30/application-of-the-davis-bacon-act-by-operation-of-law-is-here?rq=Davis-Bacon  After President Trump’s election in 2024, a series of stays of the case were ordered stayed pending the review of the Government’s legal position.

Earlier this year, the Trump Department of Labor (“DOL”) dropped several of the Biden-era reforms and said it was still studying additional rulemaking for rest. The court then vacated and permanently blocked key expansion provisions of the 2023 Davis-Bacon revisions (including coverage of distant offsite manufacturing facilities, expanded driver coverage, and retroactive application to existing contracts). Now, in August 2026, DOL filed a notice in the U.S. District Court for the Eastern District of Texas stating it would not seek to alter or rescind the remaining portions of the 2023 rule. So, in essence Trump backed off of some of the major parts of the Biden-era regulations, but not everything, indicative of his attempt to straddle some issues and court blue-collar workers who form his MAGA base.  

In the ABC v. Sonderling case, the parties filed a joint motion which summarizes the developments: 

Defendants’ review process resulted in their agreeing not to oppose entry of a final judgment in Associated General Contractors vacating the following Challenged Davis-Bacon Regulations: 

·       29 C.F.R. § 5.2, Definition of “Construction, prosecution, completion, or repair,”

§ 2(iv)(D) (onsite activities essential or incidental to offsite transportation);

·       29 C.F.R. § 5.2, Definition of “Material supplier,” § 2; and

·       29 C.F.R. § 5.5(e) (incorporation by operation of law). 

See Assoc. Gen. Contractors, ECF Nos. 106, 107, 108 (June 24, 2026). Having been vacated, these provisions are no longer at issue in the instant case. 

In addition, the parties summarized the challenges to the rules which remain to be decided:

Having conferred, the parties also agree that, as a result of the above developments, the issues remaining in this action are limited to whether the following provisions of the Challenged Davis-Bacon Regulations should be invalidated under the criteria set forth in § 706(2)(A) or (C) of the APA: 

·       29 C.F.R. § 1.2, Definition of “Prevailing wage”;

·       29 C.F.R. § 1.7(b)-(c) (geographic scope of wage data considered);

·       29 C.F.R. § 5.2, Definition of “Site of the work,” § 1(ii) (coverage of secondary

construction sites);

·       29 C.F.R. § 5.2, Definition of “Site of the work,” § 1(iii)(B) (coverage of flaggers);

·       29 C.F.R. § 5.2, Definition of “Laborer or mechanic,” to the extent applicable to “members of survey crews” as described in the preamble to the 2023 final rule see 88 Fed. Reg. at 57614;

·       29 C.F.R. § 5.25(c)(3)(i) (annualization of fringe benefit contributions); and

·       29 C.F.R. § 5.28(c) (restatement of approval requirement for unfunded plans).

It is an extensive list of developments to try to blog on, so I will not tackle them all now. Some are specialized concerns affecting flaggers, survey crews, and similar considerations. But in my view, these are the most significant developments:

The first is that the incorporation by law provision of the 2023 regulation is dead. And goodbye to bad rubbish! That idea which had percolated around DOL for some time was never fair or in accordance with prevailing case law. The idea that a contractor or subcontractor should be bound by the DBA by operation of law, whether it is incorporated or not in the contract, was one of the worse parts of the 2023 final regulations. It is better off buried and forgotten.

The second issue I think significant is still pending. It is DOL’s memorialization of its fringe benefit annualization rules. This issue has lingered for decades now. DOL wants to assure that employers do not use DBA work to in effect subsidize their private sector construction work. Hence, the annualization rulemaking requires employers to average out their fringe benefits annually rather than just paying the DBA fringe benefit rates for the hours worked on the DBA project. I am little more sympathetic with that goal but think it is sometimes too stiff particularly when applied to contractors who do little DBA covered work. In effect, they must pay DBA fringe benefit rates even when not performing DBA work. I guess I come down on the side that is not fair either and reduces competition for the government work. It is also confusing for employers who engage workers to labor on different contracts with different fringe benefit requirements. The conservative Texas court will decide whether that rule survives; and the parties have agreed the issue is ripe for a decision. So, stay tune for a court ruling and then an appeal.

And finally, of significance is the still pending decision on the new rules on self-insured unfunded plans. The rules require employers to submit these plans in advance to DOL for approval. There is a website www.unfunded.dol set up for this purpose. These rules memorialize DOL’s practice for some years, albeit unevenly enforced. Obviously, the rules do shut down some abusive practices by contractors. But on the whole they are red tape and a meaningless formality requiring employers to get their unfunded self-insure plans pre-approved. That makes work for lawyers, but it is not clear to me that it meaningfully improves the lot of the workers. Like annualization, this DOL practice will now face court scrutiny and is also ripe for a decision. Again, stay tune for a court ruling.

There is no question this is the most important DBA litigation of the last generation. In a court order dated September 28, 2026, following the joint motion, the court agreed that the matter was now ripe for consideration, and went ahead and lifted the stay of the proceedings. Judge Michael J. Truncale said he would rule on the cross motions for summary judgment “in due course.”