President Obama Issues Executive Order Allowing PLAs on
Federal Construction Projects

On February 6, 2009, President Obama issued an executive order reversing a Bush-era prohibition against the use of project labor agreements (PLAs) on federal and federally-assisted construction projects and allowing – on a discretionary, permissive basis – the use of PLAs on projects totaling $25 million or more of federal funds.

The Executive Order provides:

In awarding any contract in connection with a large-scale construction project, or obligating funds pursuant to such a contract, executive agencies may, on a project-by-project basis, require the use of a project labor agreement by a contractor where use of such an agreement will (i) advance the Federal Government's interest in achieving economy and efficiency in Federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters, and (ii) be consistent with law.

The Obama Executive Order reverses Executive Orders 13202 and 13208 opposing PLAs, which generally require contractors to sign onto and abide by certain local-area union agreements or conditions for the duration of the project.

The Executive Order provides that any PLA entered into shall:

a) bind all contractors and subcontractors on the construction project through the inclusion of appropriate specifications in all relevant solicitation provisions and contract documents;

b) allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements;

c) contain guarantees against strikes, lockouts, and similar job disruptions;

d) set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the project labor agreement;

e) provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and

f) fully conform to all statutes, regulations, and Executive Orders.

The full impact of the Executive Order is yet to be seen, and additional updates will be forthcoming as information becomes available.

For information concerning this Executive Order or PLAs in general, you should contact Mike Boldt or Ryan McCabe Poor.

Mike Boldt is a partner at Ice Miller LLP. His primary area of practice is labor law on the management side, including responding to union organizational drives, collective bargaining, arbitration, employee discipline, construction labor law, and equal employment opportunity law.

Ryan McCabe Poor is a partner at Ice Miller LLP. Ryan provides labor and employment law advice and counsel, including representation in litigation in state and federal court and before administrative bodies, collective bargaining negotiations, arbitrations, and labor relations services, assistance with employment contracts and separation agreements, and the development of policies, procedures, and training programs.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.