Unions Push to Force Merit-Based Contractors Out of Public Works Contracts

On February 4, 2022 President Biden issued an executive order (EO 14063) that will, when fully implemented, require Project Labor Agreements (PLA) on all federal construction projects of $35 million or more. This EO includes the work done by subcontractors, regardless of the value of that subcontract. Section 3 of the EO states, “Federal agencies shall require every contractor or subcontractor engaged in construction on the project to agree, for that project, to negotiate or become a party to a project labor agreement with one or more appropriate labor organizations.” This language applies to all contractors and subcontractors regardless of the value or extent of the work done and it makes no exceptions for the size, location, or working paradigm of the subcontractor.

Let us look at how this EO will work in the real world when it is implemented. The federal government requests for bids on any number of large-scale federal projects that will be funded as part of the “Infrastructure Investment and Jobs Act” that passed last November. One project could be the construction of roads and bridges. Electronic security will be required for job sites in numerous locations during the massive contract. If your business model would allow for you to bid as a subcontractor for this large-scale project, you will now be forced to enter into a collective bargaining contract with all of your workforce on this project, even if they don’t want it. It will not matter if you offer great pay, great benefits, and operate in a “right to work” state. As a condition of bidding to be a subcontractor, you will have to enter into a PLA and your workforce will have to pay union dues and contribute to union pension plans (as will you) – on top of the pay, pension and benefits you already provide. Does that sound fair?

Right now, more than 87% of the construction workforce does not belong to a union. This executive order is designed to push merit-based contractors out of public works contracts (or force them into union shops) and boost union membership. Union membership as a percentage of the construction industry has declined over the years and union leadership is working hard to reverse these trends with support from Congress (or the President when Congress won’t). The new infrastructure bill is too important to unions future fortune to allow all of that work to be done by merit-based contractors. Their questionable data provide good talking points for politicians but hold little weight when reviewed with any scrutiny.

What are some of the requirements that come to a contractor’s door when PLAs are required? Here are a few:
• Agree to recognize the union as the representative of employees on that job.
• Use union hiring hall to obtain most or all labor for the trade working on the contract.
• Pay into union pension plans, even if you already have a 401K or IRA plan for your employees.
• Force employees to pay union dues and join the union as a condition of employment.

ESA will be co-hosting a webinar with PSA on July 21, 2022 to review the impact of PLAs and what you can do to resist this trend and wade through the rising tide. Joining us will be Ben Brubeck, Vice President, Regulatory, Labor & State Affairs with the Associated Builders and Contractors (ABC). Ben is leading a multi-industry coalition to resist this EO and support legislation that will protect merit-based contractors moving forward.