June 27, 2022

Volume XII, Number 178

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June 27, 2022

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June 24, 2022

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Biden Administration Executive Order Requires Project Labor Agreements with Unions on Certain Federal Construction Projects

A project labor agreement (PLA) is a collective bargaining agreement between a contractor and the building trade union on a specific construction project. PLAs are negotiated before any workers are hired, and they establish the terms of employment on a project. Executive Order (EO) 14063, issued by the Biden administration on February 2, 2022, requires PLAs on “large-scale construction projects,” defined as Federal construction projects within the United States for which the total estimated cost of the construction contract to the Federal Government is at least $35 million.

IN DEPTH

EO 14063 provides that PLAs must include specific terms. PLAs must (a) allow all contractors and subcontractors on the project to compete for project work whether or not they are otherwise unionized; (b) contain guarantees against strikes, lockouts and similar job disruptions; (c) establish mutually binding dispute resolution methods; (d) provide other mechanisms for cooperation between labor and management; and (e) fully conform to all statutes, regulations, executive orders and presidential memoranda.

All contractors and subcontractors that work on the construction project are subject to the PLA, and its terms supersede any of their existing collective bargaining agreements. Although the PLA binds all parties and applies to all workers on the construction project, it does not require that the contractor itself unionize.

Notably, the EO allows a “senior official” within an agency the discretion to grant exceptions to the requirement for PLAs when:

  • Requiring a PLA on the project would not advance the Federal Government’s interests in achieving economy and efficiency in Federal procurement based on certain specified factors;

  • Based on market analysis, requiring a PLA on the project would substantially reduce the number of potential bidders to frustrate full and open competition; or

  • Requiring a PLA on the project would otherwise be inconsistent with statutes, regulations, executive orders or presidential memoranda.

EO 14063 is a significant leap from EO 13502, a 2009 Obama administration EO that merely “encourage[d]” Federal agencies to mandate PLAs on large-scale construction projects. A final rule implementing EO 13502, effective as of May 13, 2010, granted Federal executive agencies discretion to require use of PLAs on a project-by-project basis. EO 14063 revokes EO 13502 as of the effective date of the implementing final regulations.

WHAT HAPPENS NOW?

The Federal Acquisition Regulatory Council has 120 days to propose regulations implementing EO 14063.

© 2022 McDermott Will & EmeryNational Law Review, Volume XII, Number 81
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About this Author

Stephania C. Sanon Labor and Employment Attorney
Associate

Stephania C. Sanon focuses her practice on employment and labor law matters, with particular experience in conducting due diligence in M&A transactions, defending single-plaintiff, class and collective actions and drafting personnel policies. She regularly advises clients on a broad range of employment law issues such as terminations, exempt/non-exempt classifications, reductions in force, affirmative action compliance, sexual harassment complaints, disability accommodations and leave management.

 

Stephania drafts...

212-547-5649
Daniel P. Graham Attorney Government Contracts McDermott Will Emery Washington DC
Partner

Dan Graham leads the Government Contracts practice. Highly regarded in Government Contracts litigation, Dan Graham has over two decades of experience assisting clients across industry sectors on bid protests, Contract Dispute Act appeals, prime and subcontractor disputes and commercial litigation.

Chambers USA has ranked Dan in Band 1 for Government Contracts (Nationwide). A client quoted by Chambers said “He is a star in this field. The client added, “No task is too large or too small for Dan to take on and excel at. He has...

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