Project Labor Agreements (PLA) gained new steam with President Biden’s Executive Order 14063 requiring contractors and sub-contractors on large federal construction contracts to “negotiate or become party to a project labor agreement with one or more appropriate labor organizations.” This order came out on February 4, 2022, and implementing regulations are expected to be initially released in June 2022. This episode of The Labor Law Insider podcast explores the federal government’s expanded mandate for use of PLAs, and its potential for further encouraging unions to organize union-free companies which choose to participate in such projects.
Joining the Labor Law Insider host Thomas Godar are two experienced counsel regarding labor and employment law and federal contractor issues. Attorney Michael Schrier is co-Chair of the ABA Public Contract Law Section’s Employment Safety and Labor Committee, which is engaged in monitoring and potentially influencing regulations regarding federal government use of PLAs. Attorney Rufino Gaytán is often asked by clients to assist in assessing whether engagement in what are often high-ticket federal construction contracts and PLAs may have hidden trap doors, especially for those who are not frequent federal contractors.
This subject will be tackled in a series of two podcasts over the next two weeks. Initially, listeners will learn more about the structure of a PLA, which essentially mandates that contractors and most sub-contractors engage in a pre-hire bargaining agreement with local unions even if they are not a union contractor in order to be included in the project activity. Michael will help outline the history of PLAs, which are certainly not new to the Biden administration, but have taken a significant leap even from the pro-labor PLA regulations adopted by President Obama. In particular, under President Biden, PLAs became not just a permitted factor of a federal contract but a requirement for any and every federal construction project above the $35 million threshold. This is a significant change, and creates a substantial presumption that PLAs must be used, limiting the federal agency discretion that had been available previously to “opt-out” of PLA requirements. The claimed advantages of the use of the PLA have not changed: they would create certain guarantees against strikes or lockdowns or other job actions and establish a binding resolution procedure for disputes that might take place at the job site while binding all of the contractor and sub-contractors on the project. This may have little impact upon the wage and benefit package that contractors and sub-contractors must offer on a federal construction contract, which is already subject to the Davis-Bacon Act. However, non-union contractors would be forced to participate in collective bargaining agreements and could lead to increased union awareness and drive organizing action by the unions engaged in representing other employees on a PLA.
The podcast reviews the limited exceptions that are available for a federal agency that would seek to engage in a large-scale contract but without mandating a PLA. One such exception would be a circumstance where a PLA would “substantially reduce the number of potential bidders so as to frustrate full and open competition” and another is where a PLA would be inconsistent “with statutes, regulations, and Executive Orders, for presidential memoranda.” The third is a broad catchall exception where the PLA would not be seen as advancing the federal government’s interest in “achieving economy and efficiency in Federal procurement.” Given how hard the Biden administration has pushed its pro-labor agenda, it seems quite unlikely that federal agencies would rely on these exceptions.
The last subject discussed on this podcast relates to the public reporting requirements, which are also a new development under the Biden Executive Order. The agencies must establish a centralized database publicly available on a website to show the use of PLAs and provide descriptions of any exceptions that are actually granted. There is no discussion of the advantages available relative to creating this public disclosure requirement, but it certainly will be available to unions seeking a list of non-union contractors in which they might target for future organizing campaigns.
The next and final podcast in this series will take these issues further, review the likely regulations that we may see in June, and offer a more complete understanding why these regulations may discourage non-union contractors from bidding on such contracts, as well as the difficulties the uninitiated might discover when seeking to be part of a large-scale public contraction agreement. The Labor Law Insider will also review possible legal challenges to the expanded use of PLAs.
Be sure to join us for an interesting look into Project Labor Agreements and how they fit into the overall pro-union strategy of the Biden administration.