Federal court strikes down project labor agreement rule

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A federal court ruled on the side of contractors who protested an executive order for project labor agreements on large federal contracts.

The United States Court of Federal Claims on Jan. 19 ruled in favor of a group of construction companies that staged bid protests for an executive order signed by former President Joe Biden that required labor agreements on federal projects worth more than $35 million. The former president signed the rule in February 2022, months after signing the trillion-dollar infrastructure act.

Both the Associated General Contractors and the Associated Builders and Contractors supported revoking the executive order and officials from both organizations said member firms staged bid protests.

There were 12 ABC member federal contractors who protested three federal agencies that ordered labor agreements, ABC officials said.

“The agencies’ 2024 implementation of the mandate—ignoring the agencies’ own market research concluding project labor agreements would be anticompetitive—relying solely on executive order presidential policy is arbitrary and capricious,” wrote Judge Ryan T. Holte in his ruling. “Specifically, the functionality of the mandate as applied to the individual contracts in this case stifles competition and violates the statutory directive that agencies must promote “full and open competition” in federal procurements unless a statutory justification is properly invoked,” he added.

“ABC and its federal 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 Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a statement. “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,” he added.

“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,” said Jeffrey Shoaf, the chief executive officer of AGC. “Contractors have every right to voluntarily enter into a project labor agreement if they and their labor partners deem it appropriate,” he added.

Officials from both organizations said they were interested in working with President Donald Trump to fully eliminate the executive order.

In the Milwaukee area, there are several large projects under project labor agreements between private owners, signatory contractors and local unions. That includes the $240 million Milwaukee Public Museum, the nearly $70 million FPC Live venue and the $500 million renovation of Northwestern Mutual’s North Office. Utilities proposing hundreds of clean energy projects across Wisconsin are signed onto similar deals with construction unions.