ALEC Member Strikes a Blow Against Rule Requiring Union Labor on Federal Construction Projects

Contractors engaged in large federal construction projects can’t be required to enter collective bargaining agreements with building trade unions, a federal claims court ruled last week.

The decision, which was handed down just a year after the federal rule went into effect, poses a significant challenge to President Biden’s 2022 Executive Order mandating that federal contractors working on large projects must negotiate job site-specific collective bargaining agreements. The rule calls on federal agencies to “require the use of a project labor agreement for Federal construction projects with a total estimated construction cost at or above $35 million,” with some exceptions.

The lawsuit seeking an injunction against the rule on seven major federal construction sites was brought in March 2024 by members of the Associated Builders and Contractors (ABC), a trade association and corporate member of the American Legislative Exchange Council (ALEC).

While the court held that Biden’s executive order was “arbitrary and capricious,” it did not issue an injunction and instead gave the agencies involved until early February to file a status report on how they plan to move forward.

“For the past thirty years, executive orders surrounding the use of project labor agreements in government construction have ‘ping-ponged’ from ‘banning’ or ‘encouraging’” such agreements, Judge Ryan Holte wrote in his ruling, adding that the former president’s decision to mandate this was “unprecedented.”

The decision comes amid President Trump’s wave of new attacks on unionized labor in both the public and private sectors. ABC and other trade groups sent a letter to the president before he took office again asking him to reverse Biden’s executive order, but it was not included in his initial round of reversals.

ALEC’s Long Opposition to Project Labor Agreements

Anti-labor organizations, including the National Right to Work Legal Defense Foundation, have long opposed project labor agreements (PLAs), claiming that “politicians and government officials” try to implement PLAs in order to “reward the union officials that fund their political campaigns and keep them in power.”

ALEC has promoted its Open Contracting Act, a model bill that prohibits “public agencies from imposing labor requirements as a condition of performing public works,” since 1996. More recently, it has adopted model legislation blacklisting any employer that voluntarily recognizes a union to prevent them from receiving state economic development incentives.

Project labor agreements have been used in large construction projects since the 1930s, including in building well-known national feats such as Washington State’s Grand Coulee Dam, Walt Disney World, Yankee Stadium, and the Kennedy Space Center.

“Research shows that project labor agreements help ensure construction projects are cost effective, completed in a timely manner, and provide workers with fair wages and benefits,” the nonpartisan Economic Policy Institute stated in a public comment supporting implementation of Biden’s executive order. 

ABC, the ALEC member that filed the most recent lawsuit, has long opposed pro-labor measures and is also a member of the Job Creators Network, which fights pro-worker labor law legislation. Over the years, it has fought against prevailing wage legislation, which requires public construction projects to meet local wage standards, lobbied for “right to work” legislation in Pennsylvania, and formed coalitions with other groups to oppose moves to strengthen workplace protections under the Fair Labor Standards Act (FLSA). 

In 2023, ABC was a plaintiff in a failed lawsuit against the state of Michigan that sought a legal decision to make individual income tax rate cuts permanent. ABC and other plaintiffs were represented by the free market organization Mackinac Center for Public Policy. 

ABC runs the website The Truth About PLAs, which claims to expose “wasteful and discriminatory PLA mandates for all construction jobs.”

Although ABC appeared to be a lapsed member of ALEC as of 2013, a representative of the group attended ALEC’s 2020 States and Nation Policy Summit, and a 2020 ALEC article identified ABC as one of its members.