This post addresses the question of whether President Obama’s Executive Order No 13502 (Feb. 6, 2009) requires state or local governments to impose union-only project labor agreements (PLAs) on construction projects built with federal assistance.  As further explained below, the Executive Order is quite clear on this point: Nothing in the Executive Order requires any state or local government to impose a union-only PLA on any federally assisted project.

By its terms, E.O. 13502 imposes obligations only on “executive agencies” of the federal government, as defined in Section 2 of the Executive Order. As to such agencies, and only such agencies, the Executive Order states that in awarding contracts or obligating funds in connection with large-scale construction projects, the federal agencies “may, on a project-by-project basis,” require the use of a project labor agreement by a contractor where certain limited conditions are met. See Section 3.

Section 5 of the Executive Order states that the order “does not require an executive agency to use a project labor agreement on any construction project….” So even within the federal government no PLAs are required by Executive Order No. 13502. In any event, the Executive Order imposes no obligations on state or local governments whatsoever.

Section 7 of the Executive Order calls upon the Office of Management and Budget (OMB) to make recommendations in the future about whether broader use of project labor agreements would be helpful on construction projects receiving federal financial assistance. Such projects could include state and local projects. However, OMB has not yet made any recommendations in response to this Section, and there is again nothing in this provision that requires state or local governments to impose projects labor agreements as a condition of receiving federal financial assistance, either now or in the future.

Section 8 of the Executive Order revokes President Bush’s Executive Order No. 13202 (as further amended in E.O. No. 13208). President Bush’s Order had, among other things, prohibited state and local governments from imposing union-only PLAs on any federally assisted construction project. By revoking President Bush’s Order, Executive Order No. 13502 can be said to have removed the federal prohibition against state or local PLAs; nevertheless, the new Executive Order clearly did not thereby require any state or local action on federally assisted projects. Indeed, Executive Order No. 13502 does not direct or authorize state or local governments to do anything with regard to union-only PLAs, and the imposition of such anti-competitive bidding requirements remains subject to challenge under most state competitive bidding laws.

In conclusion, nothing in Executive Order No. 13502 requires (or even authorizes) any state or local government to impose a union-only PLA on any federally assisted construction projects.

To print a copy of this memo (blog post), please click here.

Update June 14, 2010:

To date, there has been no expansion of the scope of Executive Order 13502. In fact, Part C (4)(d) of the FAR’s final rule implementing Executive Order 13502 (released April13, 2010, effective May 13, 2010) makes it very clear Executive Order 13502 and the FAR final rule does not apply to federally assisted projects:

d. Comments regarding the use of project labor agreements for initiatives other than large-scale Federal construction projects. A number of respondents recommended that the E.O.’s policy for encouraging the use of project labor agreements be broadened….

…Finally, a number of respondents addressed use of project labor agreements in connection with Federally-assisted projects….

Response: Modifying the coverage of the final rule to address expanded consideration of project labor agreements is outside the scope of this rulemaking. This rulemaking is intended to support the implementation of the policy set forth in section 1(b) of E.O. 13502, which is expressly directed at Federal acquisitions involving large-scale construction projects. Under section 5 of the E.O., agencies are not precluded from using project labor agreements on projects not covered by the order. GSA, DoD, and NASA note that this final rule does not limit agencies’ exercise of their authorities to require project labor agreements in appropriate circumstances and to the extent permitted by law. Finally, with respect to recommendations addressing construction projects funded by Federal grants, GSA, DoD, and NASA note that such transactions are outside their policy jurisdiction and the purview of the FAR.

In short, federal agencies cannot require that local, state or private recipients of federal money, grants, assistance etc. mandate a PLA as a condition of receiving federal assistance. The decision to mandate a PLA for a specific project is left up to the recipient of the federal assistance.  In addition, contractors are always free to enter into a PLA voluntarily, as permitted and protected by the National Labor Relations Act.

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