Judge Deals Blow To Collective Bargaining On Federal Construction Projects
A federal judge blocked an executive order from former President Joe Biden that boosted the bargaining power of construction workers on government projects.
Judge Ryan Holte ruled in favor of a group of contractors that sued over a rule requiring them to enter into project labor agreements for federal contracts over $35M. The decision applies only to the seven contracts in the suit, but it clears the way for other firms to challenge the rule.
Biden signed the executive order in December 2022, effectively mandating that contractors enter into one-off collective bargaining agreements for federal construction projects that were being offered for bid.
In his Jan. 21 ruling, Holte said mandating project labor agreements, or PLAs, to win government contracts was anticompetitive and based on “arbitrary and capricious” presidential policy, Construction Dive reported.
Holte has been on the bench at the U.S. Court of Federal Claims since 2019. He was nominated to the position during President Donald Trump’s first term.
The lawsuit was supported by the Associated General Contractors of America, a construction industry lobbying group, which welcomed Holte’s decision.
“Last night’s decision is a significant victory that will allow all construction workers and their employers to compete fairly and without government-mandated coercion for large federal construction projects,” AGC CEO Jeffrey Shoaf said in a statement.
The lawsuit, which was filed over projects in six states, was filed by MVL USA, a defense contractor, and consolidated plaintiffs Environmental Chemical Corp., JCCBG2 and Harper Construction Co.
Holte gave the agencies until Feb. 3 to amend their contracts to remove PLA requirements.
PLAs outline wages and labor standards even before anyone is hired for a construction job. The Biden administration had argued that the agreements help streamline federal development projects and that mandating them would help increase the pool of available workers by leveling competition between organized and nonunion contractors bidding for jobs.
In his ruling, Holte said the Biden administration's position on PLAs was in flux, with the White House first banning the agreements, then shifting policy to encourage them and eventually creating a mandate.
Holte said the administration ignored data gathered by government agencies that indicated PLAs would decrease competition and implied the mandate was politically motivated.
Labor unions have championed PLAs as a tool to protect workers, while contractors and developers say that the mandates effectively penalize contractors that don’t have a unionized workforce.
The AGC said it planned to work with the Trump administration to eliminate the PLAs and promote competition for federal construction bids.
“Our hope is that President Trump will follow the law and understand the very obvious benefits of letting all workers compete for the opportunity to build federal projects,” Shoaf said.
