Construction Law

Use of Project Labor Agreements Encouraged in Executive Order Issued by President Obama

By Michael Payne

On February 6, 2009, President Obama issued an Executive Order encouraging agencies to use Project Labor Agreements ("PLAs") in federal construction projects with a total cost to the Government of $25 million or more.  The purpose of the Order is to avoid some of the problems which typically arise during the completion of such large projects causing various delays in their timely completion. 

"Project Labor Agreements" are defined as, "pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project and is an agreement described in 29 U.S.C. 158(f)."  Title 29 governs the relationship between management and labor as well as national labor relations and section 158 governs unfair labor practices.  While the Order is effective immediately, the FAR Council has been given 120 days-until June 6, 2009-to take "whatever action is required" to implement this order.  President Obama also instructs the Director of the Office of Management and Budget, in consultation with the Secretary of Labor and other appropriate officials, to evaluate whether broader use of such PLAs would help promote the economical, efficient and timely completion of such projects. 

This Order repeals George W. Bush's Executive Order 13202 which forbade federal agencies and other recipients of federal funding to require contractors to sign union-only PLAs as a condition of performing work on federal projects.  Interestingly enough, the history behind the most recent Order clearly demonstrates the divide between the Democratic and Republican Parties' divergent view of the role of unions.  Bush's Order repealed an Order issued by former President Clinton, the purpose of which was to overrule an Order issued by his predecessor George H.W. Bush. 

Many in the construction industry are concerned about this order and feel that the implementation will negatively impact the 84% of U.S. construction workers who are not union members.  However, the Order only encourages PLAs for large-scale construction projects, it does not mandate them. "Executive agencies may, on a project-by-project basis, require the use of a project labor agreement by a contractor where use of such an agreement will...advance the Federal Government's interest in achieving economy and efficiency in Federal procurement..."  Under the terms of the Order, the government cannot compel a contractor to enter into these agreements, and cannot exclude from competition those contractors that choose not to use them.  Additionally, contractors are not required to obtain their labor from any particular labor organization.  We will just have to wait and see how the FAR is updated before we can determine the ramifications for federal construction contractors.

Full post as published by Federal Construction Contracting Blog on February 10, 2009 (boomark / email).