Dive Brief:
- A new executive order from President Donald Trump puts a metaphorical red X across numerous policies from the Biden administration, including promoting the use of project labor agreements. However, the exact outcome is unclear.
- Perhaps most notably for construction, the March 14 order rescinds a September 2024 action from former President Joe Biden that prioritized federal spending for projects that promote and benefit workers, such as collective bargaining agreements, which include PLAs.
- The impact of the order, however, is hard to predict. The executive order directs federal agencies and guides rulemaking, but doesn’t make immediate policy changes, Carol Sigmond, partner at New York City law firm Greenspoon Marder said. The impact should become clearer once the rulemaking and public comment period for deploying a new rule bears out, Sigmond said.
Dive Insight:
In a March 17 statement calling Trump’s action a “win,” Associated Builders and Contractors acknowledged it is unclear if it will revoke the entirety of the previous administration’s pro-PLA policies in various federal regulations.
Regardless of the specifics, PLAs on federal jobs face serious challenges.
In January, Judge Ryan Holte of the U.S. Court of Federal Claims ruled in favor of employers that filed protests in response to a mandate from Biden requiring the use of PLAs on larger federal jobs.
Though Holte’s ruling applied only to those specific contracts, it opens the door to other challenges and hobbles the government’s ability to issue more project labor agreements, according to attorneys. Greeley, Colorado-based Hensel Phelps, one of the contractors to protest the mandate, is asking the court to take it a step further and permanently enjoin the government from using PLAs, Bloomberg Law reported.
On Jan. 9, ABC and 24 other construction and business groups requested that Trump eliminate PLA mandates and preferences. But the Biden mandate PLA seems to remain in effect, even if it is severely weakened.
“It appears this Trump EO does not eliminate Biden’s pro-PLA EO 14063 and related FAR rule mandating PLAs on direct federal construction projects of $35 million or more that is subject to ongoing litigation,” Ben Brubeck, ABC vice president of regulatory, labor and state affairs, said in the statement.
Chris Bailey, partner at St. Louis, Missouri-based law firm UB Greensfelder, said the upcoming federal guidance from Trump’s order will deemphasize PLA use, but likely won’t fully remove the agreements from potentially being implemented. For example, in regions with higher union prominence and participation, more federal jobs may employ PLAs.
“I suspect with the current administration reversing the Biden executive order, we’re probably going back to what we had pre-Trump’s first term, which was they may be used sparingly,” Bailey told Construction Dive.
