Court Rules Project Labor Agreement Policy Illegal

On January 19th, the U.S. Court of Federal Claims ruled in favor of bid protests from multiple associations that challenged former President Joe Biden’s controversial policy requiring anti-competitive, inflationary, union-favoring project labor agreements on federal construction projects of $35 million or more.

The Biden policy has been widely criticized by the construction industry, taxpayer watchdogs, and lawmakers for needlessly inflating construction costs and effectively steering contracts to unionized firms and union labor at the expense of taxpayers and federal laws requiring fair and open competition.

ABC and its federal contractor members are ecstatic that the judicial system has delivered justice for American taxpayers and the 90% of the U.S. construction industry workforce that is nonunion,” said Associated Builders and Contractors Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “ABC members were harmed by former President Biden’s costly executive overreach, which violates federal laws and rewards special interests at the expense of fair and open competition.

Damning evidence procured through market research conducted by several federal agencies was raised in the case’s Jan. 16 oral argument and corroborated plaintiffs’ complaints and ABC’s long-standing concerns,” said Brubeck. “The findings of federal agencies illustrate how Biden’s controversial policy mandating union-favoring project labor agreements stifles competition and raises costs on federal construction contracts nationwide.

ABC has testified before Congress that, when mandated by government, PLAs increase construction costs by an estimated 12% to 20%, reduce competition from qualified contractors and their employees, steal money from the paychecks of token nonunion workers permitted on PLA projects and exacerbate the construction industry’s worker shortage,” said Brubeck. “Typical PLA mandates discourage competition from some of the best bidders by forcing contractors to sign special union collective bargaining agreements, hire workers from union halls and apprenticeship programs and accept compulsory union representation on behalf of any members of their existing workforces. This exposes those workers to union wage theft of up to 34% of their compensation unless they join a union and vest in union benefits plans.

ABC will continue to advocate for inclusive solutions that result in cost savings, more jobs and more opportunities for all qualified small, minority- and women-owned businesses and all American workers in the construction industry,” said Brubeck. “This lawsuit did not address additional Biden policies pushing PLAs on federally assisted infrastructure projects procured by local and state governments and private developers, so the fight will go on.

The Associated General Contractors of America’s chief executive officer, Jeffrey Shoaf, issued the following statement:

Last night’s ruling vindicates the novel approach AGC put in place to challenge the Biden administration’s unlawful project labor agreement mandate. It was and is AGC’s understanding that by requiring a project labor agreement for all federal construction projects worth $35 million or more, President Biden was creating a new federal set aside program without the required Congressional authorization. That is why we encouraged and supported seven bid protests challenging the mandate from our member firms which were consolidated into the single case that was ruled on favorably last night.

This bid protest approach provided a quicker, and more effective way to challenge the outgoing president’s anti-competitive and illegal Executive Order. As a result of last night’s ruling, the mandate to use project labor agreements on federal projects worth $35 million or more is no longer legal.

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. Contractors have every right to voluntarily enter into a project labor agreement if they and their labor partners deem it appropriate. But by requiring such an agreement to qualify for large-scale federal work, the administration placed union and open shop firms in an untenable negotiating position. It would have forced union contractors to abandon their existing collective bargaining agreements and excluded open shop contractors from competing fairly as required by CICA for federal projects.

Moving forward, we will continue our conversations with the incoming Trump administration about the need to officially revoke President Biden’s illegal project labor agreement Executive Order and FAR Rules, especially in light of last night’s ruling. 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.