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Construction Industry Groups Voice Frustration Over President Biden’s Pro-Labor Executive Order

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Following recent attempts to secure his legacy as one of the most pro-labor presidents in U.S. history, President Biden now faces staunch opposition from construction industry trade associations who argue that his executive actions discriminate against nonunion contractors on federal construction projects.

The criticism comes on the heels of President Biden’s Executive Order 14063, signed on February 4, 2022, which requires project labor agreements (PLA’s) on all large-scale federal construction projects for which the total estimated cost of construction is valued at $35 million or more. PLAs, which are collective bargaining agreements negotiated between unions and contractors, set the terms and conditions of employment for a specific construction project and have been a priority for recent Democratic presidents. In 2009, President Obama issued Executive Order 13502, which permitted but did not require the use of PLA’s on federal construction projects valued at $25 million or more. Now, EO 14063 makes many of those agreements mandatory.

By issuing EO 14063, the Biden Administration intends to “provide structure and stability to large-scale construction projects” by avoiding “labor-related disruptions on projects by using dispute-resolution processes to resolve worksite disputes” and by “prohibiting work stoppages, including strikes and lockouts.” To achieve this goal, the Order mandates that, on large-scale federal construction projects, contracting agencies must “require every contractor or subcontractor engaged in construction on the project to agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.”

The Order goes on to require that the PLA’s bind all contractors and subcontractors on the construction project, contain guarantees against strikes, lockouts, and similar job disruptions, and provide for effective, prompt, and mutually binding procedures for resolving labor disputes on the project.

Notably, the Order permits contracting agencies to grant exceptions to the PLA requirement under limited circumstances, including where the subject project is of short duration and lacks operational complexity or where the project involves only one craft or trade. The Order also does not apply to projects funded by grants to non-federal agencies, including federal grants for projects overseen by state and local governments as part of the recent Infrastructure Investment and Jobs Act (2021).

Despite the exceptions to the Order’s scope, many in the construction industry have warned that the PLA requirement openly discriminates against nonunion contractors. In a letter to President Biden dated February 15, 2022, a coalition comprised of sixteen construction industry trade groups expressed their concerns over the impact of the Order. In particular, the coalition argues that PLA’s “unfairly discourage competition from quality nonunion contractors and their employees” and “supersede and interfere with existing collective bargaining agreements.” Signatories to the letter include industry leaders such as the Construction Industry Round Table, the Associated Builders and Contractors, and the National Association of Home Builders.

Given this public criticism, as well as the impact EO 14063 will have on upwards of $262 billion in federal construction projects, the Order is likely to face legal challenges similar to those faced by President Obama’s EO 13502. In light of these expected legal challenges, nonunion contractors seeking to bid on federal construction projects to which EO 14063 may apply should consult with their legal counsel before submitting their bid or signing a PLA.